## Sub-Saharan Africa’s Difficult Road to Recovery _IMF Blog, October 22, 2020_ ## Source details **Canonical URL:** [Sub-Saharan Africa’s Difficult Road to Recovery](https://www.imf.org/en/blogs/articles/2020/10/22/blog-afr-ssa-reo-october) ## Other formats - [Markdown version](/en/blogs/articles/2020/10/22/blog-afr-ssa-reo-october/index.md) - [Structured JSON version](/en/blogs/articles/2020/10/22/blog-afr-ssa-reo-october/index.json) - [Bundle manifest](/en/blogs/articles/2020/10/22/blog-afr-ssa-reo-october/bundle-manifest.json) ## Bibliographic details - Authors: Abebe Aemro Selassie - Published: October 22, 2020 --- ### Overview and immediate impact - The COVID-19 pandemic represents an unprecedented health and economic crisis for sub-Saharan Africa, jeopardizing years of development and decades-long gains against poverty while threatening the lives and livelihoods of millions of people. - Lockdown measures implemented to protect health have come with high economic and social costs. - Policymakers face the added challenge of rekindling their economies with fewer resources and more difficult choices. ### Growth projections and short-term outlook - Regional GDP projection for 2020: -3 percent growth in sub-Saharan Africa’s GDP in 2020, representing the worst outcome on record for the region. - Sectoral impacts: The drop will be even larger for economies dependent on tourism and commodity exports. - Near-term rebound: Growth in the region should rebound modestly in 2021 to 3.1 percent. - Timing of recovery: For many countries, a return to 2019 levels won’t occur until 2022–24. - Uncertainty: The path of the pandemic continues to loom over an enduring recovery. ### Policy constraints and hard choices - Top priority: Saving lives and protecting livelihoods through health spending and income and liquidity support for households and businesses. - Fiscal space: Countries entered the crisis with significantly less fiscal space than prior to the global financial crisis of 2008–09. - COVID-19 fiscal support: COVID-19 related fiscal support in sub-Saharan Africa has averaged 3 percent of GDP—markedly less than what has been spent in other regions of the world. - Trade-offs and constraints: - Fiscal policies to boost the economy must be balanced against debt sustainability, already a daunting challenge. - Monetary support for growth must be matched against maintaining external stability and longer-term credibility. - Financial regulation and supervision measures are needed to address crisis-affected banks and firms but should not compromise longer-term growth. - Efforts to stabilize and grow economies must be weighed against maintaining social stability while preparing for sustained and inclusive long-term growth. - Framing: Advanced economies have had the space to do “whatever it takes.” In sub-Saharan Africa no such luxury exists, as countries struggle to do “whatever is possible” with their scarce resources. ### IMF action and international financing needs - IMF financing provided in the year: about $16 billion financing this year alone to 33 countries. - Debt service relief: immediate debt service relief to 22 of the poorest, most vulnerable sub-Saharan African countries. - Coordination: IMF worked with countries to put in place governance mechanisms to help ensure funds benefit their people as intended. - Debt initiatives: IMF worked with the G20 to suspend debt service payments to official bilateral creditors and welcomes the extension of the Debt Service Suspension Initiative. - Additional financing needs: - Sub-Saharan Africa faces additional financing needs of $890 billion through 2023. - Private financial flows are expected to fill less than half of that need. - Current commitments from international financial institutions and bilateral donors will cover only one-quarter of the need. - Projected financing gap under that scenario: $290 billion through 2023. - Principle: No country should have to choose between paying their debt or providing food and medicine for their people. ### Policy recommendations and transformative reforms - Immediate actions: - Prioritize health spending and income and liquidity support for households and businesses. - Use available governance mechanisms to ensure funds reach intended beneficiaries. - International assistance: - The region will need access to more grants, concessional credit, and debt relief to prevent the loss of decades-worth of development gains. - Medium- and long-term reforms to foster resilient, inclusive growth: - Foster better transparency and governance to improve trust in rule of law, strengthen business conditions, and encourage external support. - Transformative domestic reforms to improve revenue mobilization, digitalization, trade integration, competition, social safety nets, and climate-change mitigation. - Vision: The pandemic presents a historic opportunity to build a better future—green, sustainable and inclusive development—and the international community has an important role to play. ### Closing - The long climb out of this crisis won’t come easy, but the actions and choices of today will be vital for a prosperous and resilient future for sub-Saharan Africa. - Quotation: “may your choices reflect your hopes, not your fears.” — Nelson Mandela *Abebe Aemro Selassie, October 22, 2020 — Sub-Saharan Africa’s Difficult Road to Recovery* --- ## Content in this bundle - **governance-commitments-in-covid-19-rapid-instruments-as-of-9-1-2020** - [governance-commitments-in-covid-19-rapid-instruments-as-of-9-1-2020 (Markdown version)](/-/media/files/topics/covid/governance-commitments-in-covid-19-rapid-instruments-as-of-9-1-2020.pdf.md){rel="alternate" type="text/markdown"} - [governance-commitments-in-covid-19-rapid-instruments-as-of-9-1-2020 (PDF)](/-/media/files/topics/covid/governance-commitments-in-covid-19-rapid-instruments-as-of-9-1-2020.pdf){rel="external" type="application/pdf"} --- ## References - [Português](https://www.imf.org/pt/News/Articles/2020/10/22/blog-afr-ssa-reo-october) - [Regional Economic Outlook](https://www.imf.org/en/Publications/REO/SSA/Issues/2020/10/22/regional-economic-outlook-sub-saharan-africa) _Source: https://www.imf.org/en/blogs/articles/2020/10/22/blog-afr-ssa-reo-october_