Incomes of Sub-Saharan African Countries Could Drop to Ten-Year Levels Due to the Covid-19 Pandemic, International Monetary Fund (IMF) Official Deplored on Monday (June 29th) interview with AFP.
For 2020, the health crisis, which forced the authorities to decree the closure of companies and the containment of populations, will result in a 3.2% recession for these countries, according to IMF projections detailed in a report on Monday. This is much worse than in April, when he still predicted a 1.6% contraction in African GDP.
Growth is expected to recover in 2021, but many of these countries will not progress significantly. Worse, commodity and tourism economies will fall. “This is a truly disturbing picture in terms of the economic outlook, which reflects the continuing weakness of the global economic environment facing the countries of the region”Abebe Aemro Selassie, the IMF’s Africa director, told AFP.
GDP per capita in the region is expected to contract by 5.4% in 2020, before increasing by 1.1% in 2021. “This will bring GDP per capita to 7 percentage points below the level predicted before the Covid-19 epidemic in October 2019, and the level will be almost equivalent to that recorded in 2010”, according to new IMF estimates.
Emergency aid and debt relief
More than 383,000 people have been infected with the coronavirus in Africa, according to the African Union Center for Control and Prevention (Africa CDC). “Unfortunately, the region still remains on the exponential side in the way the pandemic unfolds in the vast majority of countries, observed Mr. Selassie. In the absence of vigilance, there is no reason why we cannot wait for the same type of dynamics that we have observed elsewhere. ” In other words, a wide spread among populations.
The IMF has put in place emergency measures to help the economies of sub-Saharan Africa overcome the brutal downturn in the economy. In total, as of mid-June, emergency aid was provided to 29 countries in the region, amounting to some $ 10.1 billion (about 8.9 billion euros), over the two the past few months, said Selassie. And other aids will be released. Africa is also benefiting from debt relief following an agreement among the G20 countries. There is “A strong will” to alleviate the debt of the poorest, according to Selassie. As of June 16, the IMF approved the request for 28 countries, including 21 in sub-Saharan Africa.
In addition to the pandemic, other risks are clouding the economic outlook, starting with the tentative nature of the trade agreement between the United States and China in January. Washington’s threat of new taxes on European products amid a trade dispute is also threatening the recovery, Selassie warned. “A tense geopolitical environment will also have repercussions on the region”, he warned.