Sub-Saharan Africa requires US $ 425 billion additional funding over the next five years to recover ground lost during the COVID-19 crisis. The April 2021 Regional Economic Outlook for Sub Sahara Africa by the International Monetary Fund (IMF) paints this grim picture.
According to a bulletin by IMF, sub-Saharan Africa’s funding needs will be discussed at the forthcoming High-Level International Summit on Financing for Africa.
The Fund said Sub-Saharan Africa is faced with a second wave of COVID-19, which is more severe than the first. It is feared that the region could experience more outbreaks if access to vaccines remains limited.
The Fund said many of these sub-Sahara Africa countries have limited financial resources and will struggle to vaccinate frontline healthcare workers. Few will achieve the required vaccination coverage before 2023.
The IMF report says many countries in sub-Saharan Africa have entered the second wave of COVID-19 pandemic with weak financial buffers.
Sub-Sahara Africa to record slowest growth in 2021
Sub-Sahara Africa is thus expected to record the slowest growth in 2021, after contracting by 1.9% in 2020.
According to the IMF forecast, many sub-Saharan African countries will not recover to 2019 levels until 2022. In many of these counties, per capita incomes will not return to pre-crisis levels until 2025.
More positively, an accelerated vaccine rollout—or a swift, cooperative, and equitable global distribution—could boost the region’s near-term prospects.
For most countries, the cost of vaccinating 60 per cent of the population will be sizable—representing an increase of up to 50 per cent in existing health spending.
On debt, seventeen countries in sub-Sahara Africa were either in debt distress or at high risk of distress in 2020, one more than before the crisis—these countries include several small or fragile states and represent about one-quarter of the region’s GDP, or 17 per cent of the region’s debt stock.
In this regard, the Group of Twenty (G20) Debt Service Suspension Initiative has delivered valuable liquidity support, providing $1.8 billion in assistance from June–December 2020, and offering $4.8 billion in potential savings over January–June 2021.
Nonetheless, some countries may need further assistance. However, despite scarring from the crisis, sub-Saharan Africa’s potential is still undeniable.