Sub-Saharan Africa’s recovery rate of 3.7% in 2021 the slowest in the world – IMF
Sub-Saharan Africa (SSA) is projected to grow at 3.7 percentage points this year following a contraction in Gross Domestic Product (GDP) by some 2.1 percentage points.
Recovery from the Covid-19 pandemic notes the International Monetary Fund (IMF) in its October 2021 Regional Economic Outlook report, is expected to increase marginally to 3.8 percent in 2022.
Despite the projected growth rate, the IMF in its report asserts the region’s growth rate for 2021 and 2022 compared to that of the advanced economies is the slowest in the world.
According to the IMF, advanced economies for 2021 will grow by more than 5 percent, while other emerging markets and developing countries will grow by more than 6 percent.
The slow growth recovery of the region, the IMF notes, is due to the region’s slow vaccine rollout and stark differences in policy space.
Additionally, per capita income in the region is expected to remain close to 5.5 percent below pre-crisis levels with permanent real output losses ranging between -21 percent and -2 percent.
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Meanwhile, the report also highlights the increasing debt vulnerabilities of economies in the region, positing that debt vulnerability remains a source of concern and that many governments will have to undertake fiscal consolidation.
According to the IMF, overall public debt in the region is predicted to decline slightly in 2021 to 56.6 percent of GDP but remains high compared to a pre-pandemic level of 50.4 percent of GDP.
“Half of sub-Saharan Africa’s low-income countries are either in or at high risk of debt distress. And more countries may find themselves under future pressure as debt-service payments account for an increasing share of government resources,” noted Abebe Aemro Selassie, Deputy Director for IMF’s African Department.
In view of the high debt levels of economies in the region, Mr Selassie notes that governments must undertake urgent policy priorities such as spending prioritization, revenue mobilization and enhanced debt credibility.
