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Economic growth

Developing countries now account for almost a third of the world’s production and consumption. By 2030, 80% of the world’s middle class are expected to live in ‘developing’ nations. However, COVID19 will have a negative impact this:

• According to United Nations Conference on Trade and Development, global foreign direct investment (FDI) fell by 42% in 2020.
• According to the World Tourism Organization, global tourism suffered its worst year on record in 2020, with international arrivals dropping by 74%. This is especially detrimental to developing economies that rely heavily on tourism for employment and revenue generation.

Aid

Since the G20 Gleneagles Agreement of 2005, aid to African countries has increased. The UK pledged to continue to donate 0.7% of its GDP to developing nations. The UK spends over £10 billion on aid every year. However, the government have cut their donation to 0.5% of GDP for 2021 so may spend less than £10 billion.

Many nations are now less dependent on aid. For example Ghana was on track to be completely free of aid, but the COVID19 pandemic has set back this progress. The World Bank provided $100 million to Ghana to assist the country in tackling the COVID-19 pandemic. This $100 million was made available to the government and the people of Ghana as short, medium and long-term support.

Debt relief

The Gleneagles Agreement cleared the debts of 36 countries, mostly in Africa. However, many countries have seen their debt payments increase significantly in the past few years, including Ethiopia and Uganda.

According to the African Development Bank, "In the short term, the average debt-to-GDP ratio in Africa is expected to increase significantly to over 70 percent, from 60 percent in 2019. Most countries in Africa are expected to experience significant increases in their debt-to-GDP ratios for 2020 and 2021, especially resource-intensive economies."