Economy

Sub-Saharan Africa needs 245 billion dollars in external financing in 5 years – IMF

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By Folasade Akpan

According to the International Monetary Fund (IMF), low-income countries in sub-Saharan Africa face additional external financing needs of around $ 245 billion over the next five years, or $ 425 billion per year. whole region.

Abebe Selassie, director of the IMF’s Africa Department, said this Thursday in Washington DC at a press conference on the release of the April Regional Economic Outlook for Sub-Saharan Africa.

According to him, the aim is to help increase spending on the pandemic response, maintain adequate reserves and accelerate income convergence.

He added that the issues would be debated in May at the High-level International Summit on Financing Africa.

Selassie also said sub-Saharan African countries need to strengthen recovery and nurture the region’s growth potential through bold and transformative reforms.

Reforms include digitization, trade integration, competition, transparency and governance, and climate change mitigation.

He also said the immediate priority was to save lives, which would require more spending to strengthen health systems and containment efforts and cover the purchase and distribution of vaccines.

He added that for the international community, ensuring immunization coverage for sub-Saharan Africa was a global public good.

“Restrictions on the distribution of vaccines or medical supplies must be avoided, multilateral facilities such as COVAX must be fully funded, and excessive doses in rich countries must be redistributed quickly.

“The implementation of these reforms, while restoring the health of public balance sheets damaged by the crisis, will involve difficult political choices.

“By pursuing actions to mobilize domestic revenue, prioritize essential spending and manage public debt more effectively, policymakers can create the fiscal space needed to invest in recovery and consolidate debt,” Selassie noted.

He said some advanced economies had obtained enough vaccines to cover their populations on multiple occasions, while many countries in sub-Saharan Africa struggled to simply immunize essential frontline workers.

He added that only a few countries in the region would achieve widespread vaccine availability before 2023 and with such limited access to vaccines, many countries in the region would have to prepare for the risk of further waves of infection.

“It’s not just a local or regional concern, ensuring immunization coverage in sub-Saharan Africa is a global public good.

“The international community must come together to avoid restrictions on the distribution of vaccines or medical equipment, to ensure that multilateral facilities such as COVAX are fully funded and to quickly redistribute any excess doses of vaccines from rich countries,” he said. said Selassie.

He added that the economic and human costs to the region were truly unprecedented, estimating that the regional economy had contracted by -1.9% in 2020.

He said that although a little less severe than expected in October 2020, it was still the worst result ever.

“Fortunately, the region will recover this year and is expected to grow by 3.4%. Even so, per capita production is not expected to return to 2019 levels until 2022, ”he said. (NOPE)

(NAN)

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