IMF: Pandemic poses threat to Africa's development

ANKARA

Sub-Saharan Africa is facing an unprecedented health and economic crisis from the coronavirus pandemic, the IMF warned on Wednesday in its latest Regional Economic Outlook for Sub-Saharan Africa.

“The world is facing a serious challenge, and sub-Saharan Africa will not be spared,” said Abebe Aemro Selassie, director of the IMF’s African Department.

All indications are that the COVID-19 will exact a heavy human toll and cause an acute economic crisis, he added.

"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," Selassie said.

Consequently, he said, the IMF now projects the region’s economy will shrink by 1.6% this year and real per capita income will fall by even more – 3.9% on average.

“Shrinking incomes will worsen existing vulnerabilities, while containment measures and social distancing will inevitably jeopardize the livelihoods of countless people," he explained.

He also stressed the pandemic is reaching the continent at a time when many countries have little maneuvering room in their budgets, making it more difficult for policymakers to respond.

Meanwhile, IMF head Kristalina Georgieva said the IMF called for action on the G20's calls to ramp up the crisis response for developing countries during a G20 finance ministers and central bank governors meeting on Wednesday.

She said the IMF has doubled annual access limits for emergency financing, adding:

"And we will need to step up even more. To help countries steer through the depth of the recession and support their recovery, we are prepared to use our full toolbox and $1 trillion firepower, mindful of the need to use programs wisely and strengthen good governance."

In order to assist low-income countries, the IMF plans to triple its concessional lending, she added, saying special drawing rights (SDRs) might also be helpful in this context.