Economy in Sub-Saharan Africa will grow by a modest 3.7 percent in 2021 and 3.8 percent in 2022 following unprecedented contraction in 2020, forecasts IMF

Releasing its regional economic outlook, the IMF said the widening gap with advanced economies reflects sub-Saharan Africa’s slow vaccine rollout.

The International Monetary Fund (IMF) projected on Thursday that after an unprecedented contraction in 2020, the economy in sub-Saharan Africa will grow by a modest 3.7 percent in 2021 and 3.8 percent in 2022, asserting that the “momentum has slowed in the second quarter—especially in those countries most impacted by the recent wave of the pandemic.”

The IMF projected last week that the global economy will grow by 5.9 percent in 2021 and 4.9 percent in 2022, 0.1 percentage point lower for 2021 than in the July 2021 World Economic Outlook. It said for Africa to catch up with the rest of the world, its economy should grow far above the global average, not below it.

Gita Gopinath 
Gita Gopinath

Releasing its regional economic outlook in Washington D.C. on Thursday, the IMF Africa Department Director Abebe Aemro Selassie contended that the widening gap with advanced economies reflects sub-Saharan Africa’s slow vaccine rollout.

“It also reflects stark differences in policy space—as the extraordinary support offered in many advanced economies has simply not been an option in Sub-Saharan Africa,” the Fund said.

Acknowledging that the world is still in the grip of an ongoing pandemic, the IMF said looking forward, “the COVID-19 crisis is also a warning of larger, more complicated policy challenges to come.”

Managing Director Kristalina Georgieva conducts her press conference during the 2021 Annual Meetings at the International Monetary Fund. IMF Photo/Cory Hancock 13 October 2021 Washington, DC, United States 
Managing Director Kristalina Georgieva conducts her press conference during the 2021 Annual Meetings at the International Monetary Fund. IMF Photo/Cory Hancock 13 October 2021 Washington, DC, United States

“Specifically, the accelerating pace of climate change underscores the critical need for global cooperation and dialogue,” it said.

“As with the divergent global recovery, differences across the region reflect differences in vaccination and policy support. But in addition, the crisis has highlighted key disparities in resilience—across sub-Saharan Africa, the crisis has amplified pre-existing vulnerabilities and worsened divergence,” IMF said. “Moreover, gaps between countries have been accompanied by widening inequality within countries, owing to the pandemic’s disproportionate impact on the region’s most vulnerable. Further, food price inflation is threatening past gains in food security, and may add to social and political instability.”

The Fund added, “Until vaccines are widely available, sub-Saharan Africa faces repeated COVID-19 waves that will undermine confidence and growth. So policy makers will continue to face difficult trade-offs, pointing to the urgent need for spending prioritization, revenue mobilization, enhanced credibility, and an improved business climate. In this context, the recent SDR allocation has boosted the region’s reserves, easing some of the burden of the authorities as they guide their countries’ recovery.

Abebe Aemro Selassie 
Abebe Aemro Selassie

“On COVID-19, the ongoing threat of new variants highlights the need for a global vaccination response, with a particular focus on Africa. More broadly, without continued assistance and financial support, the divergent recovery paths of sub-Saharan Africa and the rest of the world may harden into permanent fault lines, jeopardizing decades of hard-won progress.

“Looking forward, the region’s potential remains undiminished. But the threat of climate change, and the global process of energy transition, means that sub-Saharan Africa may need to adopt a significantly different growth model. This presents both challenges and opportunities but underscores the need for bold transformative reforms and continued external funding. Such measures may not be easy but will be a key prerequisite of the long-promised African century.”

At her press briefing at the IMF/World Bank Annual Meetings last week, the IMF managing director of the Kristalina Georgieva said that the coronavirus economic turmoil “has been hurting Africa particularly hard,” and the continent would need about $245 billion in financing until 2025 to recover.

“We know that what has happened hurts everybody everywhere, but it has been hurting Africa particularly hard. Why? Because Africa still finds itself holding the short end of the stick on vaccinations,” Georgieva said from Washington D.C. during a press briefing on the global policy agenda. “You know it. We are only at 4 percent in Africa. We are at 60 percent in advanced economies. And Africa finds itself in a very tough place with limited fiscal space and increased debt levels in so many countries. And then on top of it, we have insecurity and conflicts in so many parts.”

Chief White House Correspondent for

Simon Ateba is Chief White House Correspondent for Today News Africa. Simon covers President Joe Biden, Vice President Kamala Harris, the U.S. government, the United Nations, the International Monetary Fund, the World Bank and other financial and international institutions in Washington D.C. and New York City.

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