Recent economic and social developments in Africa

Abstract

The COVID-19 pandemic has had a significant negative impact on the global economy and has disrupted global supply chains, exacerbated volatility in global financial markets and changed both the communications and business landscapes. The pandemic continues to have a severe impact on employment, investment, spending on health care and revenue collection. It may, moreover, lead to unsustainable debt and inflationary pressures due to supply side shortages, and to demand side shocks as a result of declining oil prices, tourism receipts and remittances. Growth in East Africa rebounded gradually as economic activity picked up towards the beginning of the fourth quarter of 2020 and as COVID-19 restrictions were loosened. GDP growth in Kenya rebounded from its contraction in the second quarter of 2020 due to strong growth in agriculture, information and communications technology and finance, and the recovery in manufacturing and exports. African countries’ policy responses should not be enacted merely to facilitate a return to the pre-COVID-19 status quo, but also to encourage investment in new areas to build greater resilience, increase productivity and ensure long-term growth.