Africa to fall behind world growth as region faces slow recovery

0:00
play article
Subscribers can listen to this article
Lagos, Nigeria.
Lagos, Nigeria.

Sub-Saharan African economies face a slow recovery from the coronavirus pandemic and the region’s economic growth will fall behind the rest of the world next year, according to the International Monetary Fund.

Gross domestic product in the region is projected to expand 3.1% next year, compared with a forecast of 5.2% for the world economy. This partly reflects sub-Saharan Africa’s relatively limited space for fiscal expansion, the Washington-based lender said in its Regional Economic Outlook report published Thursday.

Until recently home to some of the world’s fastest growing economies, output in sub-Saharan Africa is forecast to contract by a record 3% this year after the pandemic closed down cities and trading channels and curbed commodity prices, hitting large oil producers such as Nigeria and Angola.

South Africa, could contract by 8%. It will take at least until 2022 for the region to return to pre-crisis economic growth levels, the IMF said.

The shock of the pandemic will push more countries in the region into debt distress and governments should be cautious about returning to international debt markets, according to the IMF’s Africa department Director Abebe Aemro Selassie.

“Borrowing plans have to be contingent on debt being sustainable, first and foremost, and also that going forward, that there are credible policies that will ensure that debt can be repaid,” Selassie said in an interview.

A combination of dwindling revenues and higher spending during the pandemic will likely push debt-service costs in the region to 27% of GDP compared with a projection of 22% before the crisis.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
ZAR/USD
15.20
(-0.07)
ZAR/GBP
20.25
(-0.26)
ZAR/EUR
18.17
(-0.15)
ZAR/AUD
11.23
(-0.26)
ZAR/JPY
0.15
(-0.11)
Gold
1786.61
(-0.02)
Silver
22.68
(+0.13)
Platinum
965.22
(+0.30)
Brent Crude
48.27
(+0.96)
Palladium
2413.01
(+0.60)
All Share
57822.50
(-0.17)
Top 40
53021.58
(-0.12)
Financial 15
11577.71
(-0.58)
Industrial 25
79894.95
(-0.12)
Resource 10
52804.55
(+0.03)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
Yes, and I've gotten it.
21% - 349 votes
No, I did not.
51% - 829 votes
My landlord refused
28% - 449 votes
Vote