“There is a very interesting story of women as entrepreneurs outperforming men, yet they have six times less access to financing. So, open up space for women and they would carry you forward, great for them, great for Africa,” said Kristalina Georgieva, Managing Director of the IMF. In this context, “open up space” means increasing access to financing, credit, and opportunities. The Covid-19 crisis has hit women especially hard as they are more likely to work in jobs that require in-person contact, work in the informal economy, spend more hours of the day managing households, and now must also see to their children’s education. At the macro level, could the same be said about countries, especially those in sub-Saharan Africa?
Africa, the world’s second largest continent and with historically low population density, has for decades experienced a dearth of space, of the fiscal kind. Though they have continued to grow, the economies of the world’s fastest growing region by population have not keptpace. Before the public health and economic crisis wrought by Covid-19, many countries in sub-Saharan Africa – and 40% of low-income countries – were already experiencing debt distress and lacked sufficient mechanisms for generating fiscal revenues (job creation and tax collection). According to the IMF, the region’s economy contracted 2.6 percent in 2020, its first recession in 25 years. Now, the region is projected to grow just 3.3 percent, far less than the estimated global 5.5 percent in 2021.
