After the sharp contraction in their Gross Domestic Product (GDP) in Q2’20, the economies of Nigeria and other African countries are likely to make up some grounds in the remaining quarters of the year, analysts at United Capital Research have said. The analysts made the prediction in the firm’s “Pan African monitor” report obtained by New Telegraph on Monday. According to the analysts, the expected economic recovery will likely come about as governments across the continent continue to phase-out lockdown measures implemented to curb the spread of the coronavirus( COVID-19) pandemic.
The analysts said: “COVID- 19 has had a far-reaching impact on the global economy with Africa, not an exception. Using the Gross Domestic Product (GDP) growth rate of the two biggest economies (Nigeria and South Africa) in Africa as a proxy, it would not be out of place to say that second quarter of 2020 will be known as the pandemic quarter in history considering its effect on GDP growth rate during the period. “The Nigerian economic activities contracted in Q2’20, as the real GDP declined by 6.1 per cent y/y, representing the steepest economic decline in Nigeria in over three decades.
Similarly, South Africa’s economy suffered a significant contraction during the period as GDP fell by over 17.1 per cent y/y in Q2’20, or 51.0 per cent q/q. Interestingly, the agric sector proves to be immune to the pandemic by being the only sector with positive growth in South Africa, also one of the few outliers for the Nigeria GDP growth.
“For the rest of the year, we believe that the sharp contraction recorded in Q2’20 is as worst as it can get for the year as governments across the continent continue to phaseout lockdown measures implemented to curb the spread of COVID-19 within their respective country. “However, we expect the economic recovery to vary from country to country, depending heavily on the improvement in the external dynamics and the timeframe required to bring economic activities back to pre-COVID-19 levels.”