The International Monetary Fund (IMF) says Sub-Sahara Africa is yet to feel the total impact of the coronavirus, which has ravaged world economy.
According to the Bretton Wood Institution, stability indicators displayed little change in the region in 2020, and that the full impact of the disease is yet to be felt. It noted that estimates now suggest Sub-Sahara Africa contracted by -1.9 percent in 2020, a development, it noted, is better than anticipated last October (-3.0 percent), but is still the worst result on record.
It noted: “Beyond specific revenue and spending measures, authorities can also maximise fiscal space by improving their fiscal frameworks – a medium term framework that credibly balances the need for short-term support.”
The region will grow by 3.4 percent in 2021, up from 3.1 percent projected in October, and supported by improved exports and commodity prices, along with a recovery in both private consumption and investment. Looking ahead, the IMF said prolonged forbearance would merely mask the true state of the financial system, and undermine its ability to support growth in the long term.
According to the IMF, the employment rate in the region fell by about 8½ percent in 2020, adding that more than 32 million people were thrown into extreme poverty, and disruptions to education have jeopardised the prospects of a generation of school children.
Nevertheless, the IMF has pointed out that despite scarring from the crisis, sub-Saharan Africa’s potential is still undeniable, and the need for bold and transformative reforms is more urgent than ever—these include revenue mobilisation, digitalization, trade integration, competition, transparency and governance, and climate-change mitigation.
In addition, with limited resources, reforms will need to prioritise those that boost resilience to future shocks, with an emphasis on sectors with the best return on growth and employment. In this regard, the experience of different countries during the crisis suggests the need to accelerate the region’s diversification agenda.
In an executive report issued on the Regional Economic Outlook on Sub-Saharan Africa codenamed Navigating a Long Pandemic , which has been sighted by The Chronicle, the IMF explained that for the international community, ensuring vaccine coverage for sub-Saharan Africa is not simply an issue of local livelihoods and local growth.
It said: “Broad regional coverage is also a global public good. For every country, everywhere, the most durable recovery requires a global effort that covers everyone. Restrictions on the dissemination of vaccines or medical equipment should be avoided, multilateral facilities such as COVID-19 Vaccines Global Access (COVAX) should be fully funded, and channels should be put in place to ensure that excess doses in wealthy countries are redistributed quickly.
More broadly, IMF indicated that to recover ground lost during the crisis, SAA’s low-income countries face additional external funding needs of $245 billion over 2021–25, to help strengthen the pandemic response spending and accelerate income convergence. “The corresponding figure for all sub-Saharan Africa is $425 billion. These issues will be discussed at the forthcoming High-Level International Summit on Financing for Africa.”
The post Sub-Sahara Africa yet to feel impact of Covid-19 -IMF appeared first on The Chronicle Online.
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