MIL OSI Translation. Government of the Republic of France statements from French to English –
Source: IMF in French
October 21, 2021
Sub-Saharan Africa’s growth is projected to stand at 3.7% in 2021 and then 3.8% in 2022. This encouraging but relatively modest recovery suggests that the gap with the rest of the world will continue to medium. term.
The crisis has highlighted large differences in resilience between countries in sub-Saharan Africa. It also exacerbated the factors of vulnerability and inequalities that pre-existed in each country. In addition, rising food prices risk undermining previous progress in food security and increasing social and political instability.
As the pandemic continues, authorities face an increasingly difficult environment, with growing needs, limited resources and delicate trade-offs. Saving lives remains the number one priority, but there is also an urgent need to prioritize spending, increase revenues, strengthen credibility and improve the business climate.
International solidarity and cooperation remain essential, not only in immunization but also in tackling other issues of global concern, such as climate change.
Washington. The economy of sub-Saharan Africa is expected to recover in 2021, ie a clear improvement after the exceptional contraction undergone in 2020. This rebound is very encouraging and is mainly due to a favorable external environment, including a significant improvement in trade and prices. commodities. In addition, better crops have resulted in increased agricultural production. However, the outlook remains very uncertain. Indeed, as indicated by the International Monetary Fund (IMF) in its latest Regional Economic Outlook for Sub-Saharan Africa , recovery depends on progress in the fight against COVID-19 and is vulnerable to disruptions in global business and financial markets.
“As sub-Saharan Africa faces a long-lasting pandemic with repeated waves of contamination, a return to normal will be far from obvious,” observed Abebe Aemro Selassie, director of the IMF’s Africa department. “In the absence of vaccines, lockdowns and other containment measures were the only solution to contain the virus.”
“With 3.7% growth this year, the recovery in sub-Saharan Africa will be the slowest in the world. Indeed, the growth of advanced countries exceeds 5%, while that of other emerging countries and developing countries is above 6%. This discrepancy is explained by the slowness of the vaccination campaign in sub-Saharan Africa and by large differences in the scope for action.
“Real income per capita is expected to remain nearly 5½% below pre-crisis levels, with permanent real output losses ranging between 2% and 21%. The growth of countries poor in natural resources is much faster than that of countries rich in natural resources. This pre-crisis trend has been amplified by recent events, revealing fundamental differences in resilience. Countries that are poor in natural resources have a more diversified economic structure, which allows them to adapt and recover more quickly. Hikes in commodity prices have also helped some countries; nevertheless, these exceptional gains are often volatile and cannot replace more sustainable sources of growth. Moreover, disparities in fiscal space also help to explain the differences in the current pace of recovery between countries.
“The widening gaps between countries have gone hand in hand with growing disparities within countries, given that the pandemic has been particularly trying for the most vulnerable people in the region. As around 30 million people have slipped into extreme poverty, the crisis has worsened inequalities not only between income groups but also between subnational geographic areas, which could increase the risk of social tensions and instability. Politics. In this context, rising food inflation, coupled with declining incomes, undermines previous progress in poverty reduction, health and food security.
“In addition, increasing debt vulnerability remains a matter of concern and many countries will need to rebalance their budgets. Overall, according to forecasts, public debt will decline slightly in 2021 to 56.6% of GDP but will remain high compared to the pre-pandemic level (50.4% of GDP). Half of low-income countries in sub-Saharan Africa are in debt distress or are at high risk of debt distress. More countries may face difficulties in the future as debt service payments consume a growing share of government resources.
In this context, Mr. Selassie highlighted several policy priorities. “The difficult environment for the authorities before the crisis has become even more constraining as a result of the crisis. Leaders face three major budgetary challenges: 1) meeting the region’s urgent development spending needs; 2) control the public debt; and finally 3) increase tax revenues in a context where additional measures are generally not appreciated. Achieving these goals has never been easy and involves finding a subtle compromise. For most countries, prioritizing spending, increasing revenues, strengthening credibility and improving the business climate are among the urgent policy priorities.
“The recent allocation of SDRs has increased the region’s reserves, which has partly eased the burden on the authorities as they steer their country’s economic recovery. Transferring SDRs from countries with a strong external position to those with weaker fundamentals could help build the region’s resilience.
“When it comes to COVID-19, international cooperation on immunization is essential to deal with the threat of repeated epidemic waves. This would prevent the recovery trajectories of sub-Saharan Africa and the rest of the world from further diverging and turning into permanent fault lines, which would jeopardize decades of hard-won social and economic progress.
“In the longer term, the immense potential of the region remains intact. However, in the face of the threat of climate change and in the context of the global energy transition process, sub-Saharan Africa may need to adopt a more innovative and greener growth model. This raises challenges and also opens up opportunities, and highlights the need to embark on bold and transformative reforms and mobilize sustainable external financing. These steps may not be easy to take, but they are essential preconditions for realizing the long promised African century. “
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.