Economic growth is making a welcome return to Africa in 2021. Even South Africa is in line for a moderate economic recovery. However, the risks of debt default loom large for some countries. The World Bank's latest Africa's Pulse tells us why.
The initial fears that the onset of Covid-19 would reverse years of economic gains and progress for Africa have subsided and given way to a renewed optimism about the region's resilience.
The first wave of Covid-19 at the start of 2020 sparked a global economic shutdown, which restricted the movement of goods and curtailed trade. Global demand dropped, while supply was severely restricted. Prices fell.
No movement across global borders meant oil was subjected to extreme volatility. The oil price plunged to drastic new lows. Exports collapsed - as did imports.
Single-commodity economies, such as Angola and Nigeria, and export-powered countries, including South Africa, were left licking their wounds in the context of 2020. Tourism-dependent economies were no better off. No visitors, no revenue. The misery was widespread as Covid-19 wreaked havoc not only on economies but also on public health and people.
The Covid-19 crisis was both a supply and a demand shock
Capital took flight. Some...