SSA needs $245bn of Africa’s $425bn to keep afloat during pandemic, says IMF
THE INTER NATIONAL MON ETARY FUND (IMF) has stated that lowincome countries in the sub-Saharan African region will require about $245 billion in external funding over the next five years, and the entire continent needing as much as $425 billion in order to stay afloat and also help boost spending on the pandemic response, accelerate income convergence and maintain adequate reserves.
Abebe Selassie, IMF’s director, African Department, disclosed this during a media conference on the release of its April Regional Economic Outlook (REO) for the region.
Selassie posited that countries within the sub-Saharan region will need to reinforce the recovery and nurture the region’s growth potential through bold and transformative reforms which include: digitalisation, trade integration, competition, transparency and governance and climate-change mitigation.
The IMF director asserted that the international community is ensuring that vaccine coverage was a global public good as the immediate priority was to save lives, which would require more spending to strengthen health systems and the containment efforts as well as to cover vaccine procurement and distribution across the region.
According to him, restrictions on the dissemination of vaccines or medical equipment should be avoided, multilateral facilities such as COVAX should be fully funded and excess doses in wealthy countries should be redistributed quickly. Delivering on these reforms while restoring the health of public balance sheets damaged by the crisis will entail difficult policy choices.
“By pursuing actions to mobilise domestic revenues, prioritise essential spending, and more effectively manage public debt, policymakers can create the fiscal space needed to invest in the recovery and put debt on a sustainable footing,” Selassie noted.
Furthermore, the IMF Africa chief said some advanced nations had made available enough vaccine to cover their populations several times over, while scores of sub-Saharan African countries are besieged with the issue of simply vaccinating essential frontline workers and adding that only a few countries in the region would achieve widespread vaccine accessibility before 2023 and that with such limited access to vaccines, many countries in the region should brace up for the risk of additional waves of infection.
“This is not just a local or regional concern, ensuring vaccine coverage for sub Saharan Africa is a global public good. The international community needs to come together to avoid restrictions on the dissemination of vaccines or medical equipment, to ensure that multilateral facilities such as COVAX are fully funded, and to quickly redistribute any surplus vaccine doses from wealthy countries,” he said.
While estimating that the economic and human costs for the region were truly unprecedented as the regional economy contracted by 1.9 per cent in 2020, Selassie said that it was still the worst outcome on record and somewhat less severe than the one projected in October same year.
“Fortunately, the region will recover some ground this year and is projected to grow by 3.4 per cent. Even so, per capita output is not expected to return to 2019 levels until after 2022,” he said.