Most of African economies will be likely to experience lower growth lower than expected growth in 2020 compared to the 2019 projections, says new study.
Policy responses to combat the crisis – lockdowns led to decline in demand for African commodities, depreciating exchange rates and higher inflation, according to a new report by the UN Economic Commission for Africa (UNECA). “Supply side shortages especially for medical equipment and basic food commodities. Policy responses to combat the crisis – lockdowns led to decline in demand for African commodities, depreciating exchange rates and higher inflation,” it said.
“However, lower demand for goods and services led to lower than expected core inflation – most economies will experience lower than expected growth in 2020 compared to the 2019 projections,” it said., indicating that locust invasion in East Africa affected food supply, led to an increase in food inflation, and drought in Southern Africa has also posed threat to food security.
Over 50% of countries has lower inflation, while a handful of countries are facing high price increases: eleven countries already have their compound inflation rate over the first seven/nine months exceeding 6%. “Mineral-rich countries, agriculture commodity exporters and oil importing countries have recorded noticeable increases in quarterly inflation rates. Inflation in oil exporters’ countries remained quasi-stable but high,” according to the report.
In Nigeria food items has been overtaking all consumption basket items, with an important influence from imported food items, while urban inflation remains higher than rural, according to ‘Trends and Analysis of Food Items in the Consumer’ Basket by African Centre for Statistics and Macroeconomic and Governance Division Economic Commission for Africa.