section_path: Economic impact by continent, region and country/Africa
section_name: Africa
paragraph_text: Africa
  
  Prior to the pandemic, average public debt in Africa was predicted to progressively drop. Instead, average net government debt increased by 2 percentage points in 2020, reaching 61% GDP. The surge in Sub-Saharan Africa was significantly greater, with over 6 percentage points on average. Countries are suffering increasing debt payment expenses as a result of this rising debt burden. Some countries have lost complete access to the global markets thus becoming reliant on relatively limited internal resources and concessional finance.
  
  One of the responses of Africa's microfinance institutions to the COVID-19 crisis was to increase reliance on digital channels to support borrowers.
  
  The European Investment Bank, with the help of the Making Finance Work for Africa Partnership (MFW4A), conducted the Banking in Africa survey in early 2021. 78 banks in Sub-Saharan Africa were surveyed. The banks that took part control nearly 30% of the continent's assets. The results showed that almost two-thirds of the Banks surveyed tightened lending rules in 2020 – 2021. More than 80% expanded their restructuring or loan moratoriums.
  
  According to the European Investment Bank 's Banking in Africa study 2021, digital offerings by Sub-Saharan African banks are increasing, especially as a result of the COVID-19 pandemic. The majority of the banks polled said that the pandemic has accelerated the speed of digital transformation, and that this change is permanent. 89% of the banks polled claimed that the pandemic has hastened the digital transformation of their internal operations; the same percentage believes that the consumer movement toward digital channels will continue once the virus has ended. Few banks were required to modify their employee levels, while slightly under one-third adjusted their prices. Approximately half of the answering banks had employed guarantees, the majority of which came from the central bank, the government, or an international financial institution. During the first half of 2020, the cost of overseas borrowing climbed dramatically. However, at the beginning of the pandemic, banks were well capitalized, thus they were able to resist liquidity challenges.
  
  Around 88% of enterprises in countries where COVID-19 follow-up surveys were conducted (three in Southern Africa, one in East Africa, four in West Africa, and one in North Africa) were suffering diminished liquidity, with more than 55% of them closing temporarily during the COVID-19 pandemic. Almost 8% had declared bankruptcy, and 26% of enterprises are past due on financial institution commitments. Firms that depend on equity are at 36%. rather than depending on commercial bank loans to address cash flow issues, these are more likely to succeed at 16%.
  
  The International Monetary Fund predicts that average growth in the African continent would return to 4.5% in 2021 and 4.0% in 2022. All economies except the Comoros are expected to increase in 2021. However, large differences in growth rates are expected, between 0.2% in the Republic of the Congo and 7.6% in Kenya in 2021.