The economy of sub-Saharan Africa is projected to grow by 3.7 percent in 2021 and 3.8 per cent in 2022, depending on the success of efforts to curb Covid-19.
The International Monetary Fund (IMF) in its October Regional Economic Outlook for sub-Saharan Africa, One Planet, Two Worlds, Three Stories, published on Thursday, shows that vaccination in sub-Saharan Africa has been slower than other regions due to low access to and supply of vaccines.
The IMF outlook shows that export restrictions by major vaccine manufacturing countries, and demands for booster shots in advanced economies have slowed the vaccination rate on the continent. Just three percent of the population which has been fully vaccinated, compared with close to 60 percent or more vaccinated in developed economies.
“On Covid-19, the threat of new variants highlights the need for a global response, with a particular focus on the unvaccinated people of Africa.
‘‘The IMF has proposed a plan to vaccinate at least 40 per cent of the total population of all countries by the end of 2021, and 70 percent by the first half of 2022,” the report states.
The pandemic has exacerbated pre-existing vulnerabilities and inequality in countries, and inflation threatens to jeopardise gains made in food security, which could lead to social and political instability.
The IMF’s African Department director Abebe Selassie said if the pandemic persists, a return to normal will not be easy.
“In the absence of vaccines, lockdowns and other containment measures have been the only option for containing the virus.
At 3.7 percent this year, the recovery in sub-Saharan Africa will be the slowest in the world as advanced markets grow by more than five per cent, while other emerging markets and developing countries grow by more than six per cent,” said Mr Selassie.
The IMF has proposed a plan to vaccinate at least 40 per cent of the total population of all countries by the end of 2021, and 70 percent by the first half of 2022.
Commodity price increases have also helped some countries, but these windfall gains are often volatile and cannot substitute more enduring sources of growth.
With about 30 million people thrown into extreme poverty, the crisis has worsened inequality across income groups as well as subnational geographic regions.
The report indicates that increasing debt vulnerabilities remain a source of concern, and many governments will have to undertake fiscal consolidation.
Public debt is predicted to decline slightly in 2021 to 56.6 per cent of GDP, from a pre-pandemic level of 50.4 per cent of GDP.
Half of sub-Saharan Africa’s low-income countries are either in or at high risk of debt distress.
And more countries may find themselves under future pressure as debt-service payments account for an increasing share of government resources.
There are also vulnerabilities related to the composition of public debt. About half of the region’s public debt is external. China is a dominant player among bilateral creditors, accounting for about half of the debt to bilateral creditors, and 7.5 per cent of total public debt.
Also, debt to China is concentrated in five countries namely Angola, Cameroon, Ethiopia, Kenya, and South Africa, accounting for 60 per cent of China’s outstanding loans to Africa.
The recent Special Drawing Rights (SDRs) allocation has boosted the region’s reserves, easing some of the burden of authorities as they guide their countries’ recovery. And rechanneling SDRs from countries with strong external positions to countries with weaker fundamentals could help to bolster the region’s resilience.