MIL OSI Translation. Government of the Republic of France statements from French to English –
Source: IMF in French
April 15, 2021
According to our projections, growth in sub-Saharan Africa is expected to reach 3.4% this year, after the 1.9% contraction observed in 2020 (the worst result on record) which led to a sharp increase in poverty. In many countries, per capita income will not return to its pre-crisis level until 2025.
The short-term outlook is subject to considerable uncertainties, which are linked to the course of the pandemic, access to vaccines and less favorable external financing conditions. The economic and social upheavals caused by the crisis will further complicate economic policy making.
In this context, accelerating access to vaccines is essential to enhance the region’s health and growth prospects. This involves increasing spending on vaccine deployment, strengthening local health systems and remaining vigilant on containment measures.
To unlock the region’s immense potential, a three-pronged strategy is needed: bold reforms to stimulate economic growth and diversification; fiscal measures, in particular to increase revenues and limit debt vulnerability; as well as a significant increase in external concessional financing in support of this reform program.
Washington. Economic growth is expected to resume in sub-Saharan Africa in 2021. However, it will be difficult to find the path to recovery and to overcome the long-lasting effects of the pandemic. Leaders must work to roll out vaccines, while cleaning up public balance sheets that have been squeezed by the crisis. It is more important than ever to carry out transformative reforms and obtain more external aid to revitalize the growth of the region, notes the International Monetary Fund (IMF) in its latest report entitled Regional Economic Outlook for Sub-Saharan Africa .
“Sub-Saharan Africa continues to face an unprecedented health and economic crisis,” said Abebe Aemro Selassie, director of the IMF’s Africa department. “Since our last regional economic outlook assessment in October 2020, the region has experienced a second pandemic wave, larger in scale and faster than the first. Many countries continue to face or prepare for other waves, as access to vaccines remains low.
“The pandemic has had a devastating impact on the region’s economy. The contraction observed in 2020, estimated at 1.9%, is a little less severe than expected last October, but it remains the worst result ever recorded in the region. According to our projections, regional growth is expected to be 3.4% in 2021, but per capita production will not return to its 2019 level until after 2022.
“Economic hardship has caused massive social upheaval and far too many people have slipped back into poverty. In many countries, per capita income will not return to its pre-crisis level until 2025. The number of people living in extreme poverty in sub-Saharan Africa has increased by more than 32 million, according to our projections. The learning loss is enormous: students missed 67 days of education, more than four times as many as in advanced countries.
“Sub-Saharan Africa will be the slowest growing region of the world in 2021: lack of access to vaccines and policy space is holding back the recovery in the short term. While some advanced countries have obtained enough doses to immunize their own populations multiple times, many countries in sub-Saharan Africa are struggling to immunize their essential frontline workers. Few of them will have access to large-scale vaccines before 2023. Most countries in the region have not been able to take the extraordinary fiscal and monetary support measures that are now driving the recovery in countries. advances.
“The outlook for sub-Saharan Africa remains exceptionally uncertain. While the risks associated with the pandemic are predominant, other factors such as access to external finance, political instability, internal security or climate shocks could jeopardize the recovery. On a more positive note, a faster than expected supply or distribution of vaccines could improve the region’s short-term outlook. “
In this context, Mr. Selassie highlighted priorities for action:
“The immediate priority is to save lives. This means spending more on strengthening health systems and containment measures, as well as on acquiring and distributing vaccines. For most countries, the cost of immunizing 60% of the population will require increased health spending of up to 50%; for some, this cost could exceed 2% of the GDP.
“For the international community, ensuring immunization coverage for sub-Saharan Africa is a global public good. The dissemination of vaccines or medical supplies should not be restricted, multilateral mechanisms such as COVAX should be fully funded, and doses that are in excess in rich countries should be redistributed quickly.
“The second priority is to strengthen the recovery and nurture the region’s growth potential through bold and transformative reforms. Areas of concern include digital switchover, trade integration, competition, transparency and governance, as well as climate change mitigation.
“To carry out these reforms, while cleaning up public balance sheets damaged by the crisis, difficult choices will have to be made. By increasing domestic revenues, prioritizing essential spending, and managing public debt more effectively, policymakers can create the fiscal space they need to invest in recovery and reduce debt to sustainable levels.
“The 17 countries in the region that are at high risk of debt distress or are already in debt distress will need additional help. For some, the G20 debt-service suspension initiative has provided a precious respite, reducing debt service to around $ 1.8 billion until the end of December 2020 and possibly by An additional $ 4.8 billion in the first half of 2021. For countries where larger relief may be needed, the G20 Common Framework for Debt Treatment can offer solutions that are coordinated across the board. creditors and adapted to the circumstances of each country.
“The international community, including the IMF, has acted quickly to meet the region’s emergency needs in 2020, but the region will need further assistance to make up for lost ground during the crisis. A possible general allocation of special drawing rights from the IMF would help provide liquidity to the most vulnerable countries in sub-Saharan Africa.
In addition, to increase spending to fight the pandemic, maintain sufficient reserves and accelerate income convergence, low-income countries in sub-Saharan Africa face additional external financing needs of around $ 245 billion over over the next five years, the corresponding figure for the region being $ 425 billion. These issues will be discussed in May at the high-level international finance summit for Africa. “
IMF Communications Department
PRESS OFFICER: Andrew Kanyegirire
PHONE: +1 202 623-7100 EMAIL: MEDIA@IMF.org
EDITOR’S NOTE: This article is a translation. Apologies should the grammar and / or sentence structure not be perfect.