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Emerging Markets: The Pandemic’s Fallout And Existing Challenges Restrain Sub-Saharan Africa’s Recovery

June 16, 2021

Sub-Saharan Africa (SSA) will likely be the among world’s slowest growing regions in 2021. The size of the economies of five key SSA countries (Ethiopia, Ghana, Kenya, Nigeria, and South Africa) will be 6.6% smaller than the pre-pandemic long-run trend-based estimate by the end of 2024. Pandemic-induced GDP growth shock has hit the SSA sovereigns' fiscal metrics; an expected slow recovery will continue to contribute to existing challenges in the region. SSA corporations are recovering, but remain subject to longstanding red tape and government failures, which have been amplified by the pandemic and are sources of operational friction. SSA banking sectors’ growth prospects remain subdued due to the pandemic's lingering impact, profitability levels may recover to pre-crisis levels after 2022, while credit losses moderate.

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