SSA to see world's slowest growth in 2021

The IMF estimates additional external funding needs for the region for the 2021-2025 period at US$425 billion.

16 April 2021 | Economics

JOHANNESBURG - Sub-Saharan Africa is set to record the slowest economic growth of any world region this year as the continent struggles to bounce back from a pandemic-triggered downturn, the International Monetary Fund (IMF) said yesterday.

Wealthy countries must step up to ease access to vital vaccines and make financing available to Africa, where the global health crisis and its economic fallout plunged 32 million people into extreme poverty last year, the Fund said.

"Really, how the international community can help the region is by improving access to vaccines," Abebe Aemro Selassie, the head of the IMF's Africa department, said.

He was speaking in an interview to Reuters ahead of yesterday's publication of the regional economic outlook for Sub-Saharan Africa.

The continent has fallen behind much of the rest of the world in vaccinating its population as countries with the means to reserve shots have cornered supplies.

Selassie said mechanisms like the World Health Organisation-backed Covax vaccine facility already exist to channel shots to countries in need.

"But these need to be matched with financing and investment to massively scale-up the global supply of vaccines as quickly as possible," he said.

UNEVEN REBOUND

Following a contraction of 1.9% last year, Sub-Saharan Africa's regional economy will grow by 3.4% in 2021, according to the regional outlook. That's well below a global forecast of 5.5%.

Per capita output is not expected to return to 2019 levels until 2022, the outlook said.

Africa's rebound will be uneven. South Africa, the region's most developed economy, will grow by 3.1% following a 7.0% contraction last year. Oil producers Angola and Nigeria, meanwhile, will grow by 0.4% and 2.5% respectively.

In East Africa, Kenya is predicted to record GDP growth of 7.6%, after a contraction of 0.1% last year, while Ethiopia's growth will slow from 6.1% in 2020 to 2.0% this year.

DEBT

Last year's global downturn meanwhile worsened debt burdens in many African countries.

Seventeen countries were in debt distress or at high risk of it last year, the IMF report stated. And employment fell by 8.5%.

At a time when governments have limited fiscal space, their needs are growing.

For most countries, vaccinating 60% of their population will require an increase of up to 50% in existing healthcare spending.

The IMF estimated additional external funding needs for the region for the 2021-2025 period at US$425 billion.

Selassie said governments needed to be ready to make bold reforms to eliminate policy-induced growth constraints. – Nampa/Reuters

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