SWITZERLAND, JULY 02 – The International Monetary Fund(IMF) has reviewed downwards, its projection on sub-Saharan Africa’s economy in 2020.
“The outlook for 2020 for sub-Saharan Africa is considerably worse than was anticipated in April and subject to much uncertainty,”the global finance organization said in a report titled, ‘Regional Economic Outlook for Sub-Saharan Africa, June 2020 Update’, which was shared with Today’s Echo on Tuesday.
Economic activity this year is now projected to contract by some 3.2 percent, reflecting a weaker external environment and measures to contain the COVID-19 outbreak.
“Growth is projected to recover to 3.4 percent in 2021 subject to the continued gradual easing of restrictions that has started in recent weeks and, importantly, if the region avoids the same epidemic dynamics that have played out elsewhere. Africa’s authorities have acted swiftly to support the economy, but these efforts have been constrained by falling revenues and limited fiscal space,” the IMF said.
The finance institution recommended that regional policies should remain focused on safeguarding public health, supporting people and businesses hardest hit by the crisis, and facilitating the recovery. The region cannot tackle these challenges alone, and a coordinated effort by all development partners will be key.
“In Nigeria, the economic contraction is projected to deepen to 5.4 percent in 2020 (down by 2.0 percentage points from the April 2020 Regional Economic Outlook: SubSaharan Africa) as the country was hit hard by plummeting oil prices, lower oil production quota and declining activity.
“Growth is projected to recover to 2.6 percent in 2021 with rising oil prices and increasing production,”The IMF added.
In its April regional outlook, the IMF had predicted a 3.4 percent contraction.