JOHANNESBURG – NKC African Economist said yesterday that its forecast showed it could take up to three years for the South African economy to recover to the levels it was in before the coronavirus (Covid-19) pandemic.
NKC’s senior economist Pieter Du Preez said South Africa was among Africa’s big three economies that would take significant knocks from the pandemic.
Du Preez said the recovery for these economies, including Nigeria and Egypt, would be gradual.
“South Africa could contract 7.2 percent this year, due to fall in consumption, investment and manufacturing,” Du Preez said.
“We are expecting South Africa to return to pre-Covid-19 only in 2023. In effect, SA is losing three years of economic growth due to Covid-19.”
This as a new study by the World Health Organization (WHO) regional office for Africa found that 183000 to 190 000 people in Africa could die of the virus if containment measures fail.
The research looked at 47 countries in the WHO African Region with a total population of 1billion.
The study, which is based on prediction modelling, also found that 29 million to 44 million could get infected in the first year of the pandemic
The model predicts the observed slower rate of transmission, lower age of people with severe disease and lower mortality rates compared to what is seen in the most affected countries in the rest of the world.
WHO regional director for Africa Dr Matshidiso Moeti said while Covid-19 likely won’t spread as exponentially in Africa as it has elsewhere in the world, it would likely smoulder in transmission hotspots.
“Covid-19 could become a fixture in our lives for the next several years unless a proactive approach is taken by many governments in the region,” Moeti said.
Du Preez said the global economic downturn, brought about by the Covid-19 pandemic and oil price shocks, was set to affect every region in the world.
Du Preez said Africa was expected to be one of the hardest hit regions globally.
He said oil producing countries in the continent were likely to be in for a rough time, as price recovery was proving to be slow, meaning that their economies could take years to bounce back.
Du Preez forecast that Libya would contract by 28.8percent, Algeria by 9.6 percent, Angola 9.3percent, as it is still facing a four-year recession.
He said global travel restrictions would also hurt countries that were dependent on tourism, like Mauritius.
Du Preez, however, said Africa’s fast-growers like Rwanda, Ghana and Ethiopia would remain resilient and bounce back relatively quickly from the Covid-19 impact.
He commended South Africa, Tunisia and Senegal for having responded aggressively with conventional monetary and fiscal policies, but warned that these may not be enough.
“If the size of the policy response is not commensurate today, the damage will require a much larger response later,” Du Preez said.
By Siphelele Dludla