Economic growth in sub-Saharan Africa will lag relative to global production in part due to the slow launch of coronavirus vaccines, and further delays in immunization will increase the chances that the disease will become an endemic problem, according to the Fund. International Monetary.
The regional economy is likely to expand 3.7% this year, after contracting 1.7% in 2020, when restrictions to slow the spread of Covid-19 weighed on activity and trade, the lender said on Thursday with Washington headquarters on its Economic Outlook for Sub-Saharan Africa. . The rebound will be slower than that of advanced economies, and the divergence in growth is expected to persist through 2023, Abebe Aemro Selassie, director of the IMF’s Africa department, said in an October 18 interview.
“Instead of catching up and closing the income gap, what we see is that the region is not getting to where things were on the eve of the pandemic,” he said. The outlook reflects different access to vaccines and “stark differences” in the availability of policy support, the lender said.
Africa is the least inoculated region in the world, with only 5.23% of its 1.2 billion people fully immunized against the disease, data from the Africa Centers for Disease Control and Prevention shows. The IMF’s baseline outlook assumes that only a few countries in sub-Saharan Africa will achieve widespread vaccine availability by 2023, although demand for booster injections in advanced economies could compromise supply, he said.
Further delays in launch would leave sub-Saharan Africa exposed to newer and more virulent strains of the virus, increasing the possibility that Covid-19 will eventually become a permanent endemic problem throughout the region, inevitably weighing on confidence. , growth and the strength of the recovery, ”he said.
An international endemic disease that leads to an adjustment in the behavior of companies and households and affects regional vaccine programs could cost sub-Saharan Africa an additional 1.5% of gross domestic product during the four years starting in 2022, according to the lender.
The different outlooks for countries in the region also reflect divergent vaccine programs and support for fiscal and monetary policy, and show how diversified economic structures muted the impact of the virus and helped some to adapt quickly to changes, the lender said. . Low-income countries in the region require $ 245 billion in additional funding over the next five years to ensure a strong recovery and make up lost ground; the corresponding figure for all of sub-Saharan Africa is $ 425 billion, the IMF said.
While the special drawing rights assigned by the IMF to its members in August have boosted the region’s reserves, the voluntary channeling of SDRs to needy countries from those with strong external assets may magnify the impact of the new allocations, he said.
Options to redirect assets include through the fund’s Growth and Poverty Reduction Trust, which provides interest-free loans, and the creation of a Trust for Resilience and Sustainability, which could help income countries low and middle vulnerable to move towards more climate-friendly projects. futures, Selassie said. Talks about a third option, which could see assets go to prescribed SDR holders, such as the World Bank, are in the early stages, he said.
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