A drop in GDP is among the economic and development impacts of the Covid-19 pandemic, a report from the IMF has revealed.
Sub-Saharan Africa is under threat from unprecedented health and economic crisis due to the Covid-19 pandemic, according to a report by the International Monetary Fund (IMF).
With 7,800 cases across 43 Sub-Saharan countries, as of 13 April, and the number still rising, some major African economies have already been hit, led by South Africa, Cameroon and Burkina Faso, and a further impact on vulnerable groups, including informal workers, and smaller businesses, expected.
“All indications are that the Covid-19 pandemic will exact a heavy human toll and cause an acute economic crisis,” said IMF Africa department director Abebe Aemro Selassie, in a statement.
“The region is facing plummeting global growth, tighter financial conditions, a sharp decline in key export prices, and severe disruptions to economic activity from the measures that have had to be adopted to limit the viral outbreak.”
The region’s GDP will shrink, with the report, Regional Economic Outlook: Sub-Saharan Africa, projecting growth of -1.6%, the worst performance on record and a 5.2% drop from what was previously predicted for 2020. Per capita income, meanhwile, will drop an average 3.9%.
Aside from threatening livelihoods, Selassie added, “the pandemic is reaching the continent at a time when many countries have little room for manoeuvre in their budgets, making it more difficult for policymakers to respond”.
Selassie called for the prioritisation of public health spending, followed by financial support to vulnerable households, particularly informal workers and at-risk industries:
“The ability of countries to mount an adequate response will depend in large part on their access to concessional funding from the international community.”
He also drew attention to the importance of policy and collaboration to supporting companies and jobs: “In support of these domestic measures, a coordinated effort by all development partners will be key.”
The IMF is working with financial institutions the World Bank and African Development Bank (AfDB), and developmental organisations World Health Organization and African Union
For its part, Selassie highlighted the USD 11 billion that has been provided to 32 countries in sub-Saharan Africa, with further support in the form of debt relief through the IMF Catastrophe Containment and Relief Trust and campaigning for further debt relief.
The IMF has provided financial support to countries including Morocco, Tunisia, Madagascar, Rwanda, Guinea, Gabon, Senegal, Ivory Coast and Central African Republic.
São Tomé and Príncipe, Cabo Verde, Democratic Republic of Congo, Comoros are among the latest countries to have received approval for IMF support.
AfDB meanwhile, has provide USD$10 to help its members fight the pandemic.