Twice every year, the International Monetary Fund publishes its regional economic outlook report for sub-Saharan Africa. The first report this year, titled Navigating a long pandemic, explains the challenges faced by the region and gives policy recommendations to deal with certain critical issues. Here’s a summary of the report:
Economic growth in sub-Saharan Africa will recover this year, but the recovery will be slow and difficult. The region is projected to grow by 3.4 percent, recovering from the 1.9 percent contraction in 2020, however, per capita output is not expected to return to 2019 levels until after 2022. In many countries, per capita incomes will not return to pre-crisis levels until 2025.
Sub-Saharan Africa will be the world’s slowest-growing region in 2021. Increased economic hardships caused by the pandemic have placed many below the poverty line, increasing the number of extremely poor people in the region by more than 32 million.
Sub-Saharan Africa needs external funding of $425 billion over the next five years to help boost spending on the pandemic response, maintain adequate reserves, and accelerate income convergence.
Students in sub-Saharan Africa have missed more than four times the level in advanced economies. And while some advanced economies have secured enough vaccines for their populations, many countries in sub-Saharan are struggling to vaccinate their essential workers.
“The outlook for sub-Saharan Africa continues to face greater-than-usual uncertainty. While pandemic-related risks dominate, other factors such as access to external financing, political instability, domestic security, or climate shocks could jeopardize the recovery. More positively, faster‑than‑anticipated vaccine supply or rollout could boost the region’s near-term prospects,” said Abebe Aemro Selassie, Director of the IMF’s African Department.
Save lives by implementing targeted containment efforts, expanding access to vaccines, and strengthening local health care. “The immediate priority is to save lives. This will require more spending to strengthen health systems and containment efforts, and cover vaccine procurement and distribution,” Selassie said.
Create fiscal space by implementing bold transformative reforms. This includes trade integration, mobilizing domestic revenues, enhancing digitalization, prioritizing essential spending, improving transparency and governance, strengthening social protection, mitigating climate change and managing public debt effectively.
Deeper support for countries in debt distress and those at high risk of being in debt. “For countries where deeper relief may be needed, the G-20 Common Framework for Debt Treatment can provide solutions coordinated across creditors and tailored to each economy’s circumstances … A potential general allocation of special drawing rights from the IMF would help provide liquidity to most vulnerable sub-Saharan African countries,” Selassie said.