Page 26 - Nile Explorer Issue 12

Around Africa

If approved, IMF
funds made available
under a major issuance
of the IMF’s Special
Drawing Rights (SDRs)
– reserves from central
banks of all IMF
members – will provide
additional resources
to cash-strapped
governments on the A grab of the G20 virtual summit (Courtesy AP)
continent.
Africa’s post COVID-19 economic recovery

and debt relief

frica’s economic growth could extreme climate events. aftermath. The number of people in
Arebound in 2021, provided that Under projected scenarios for extreme poverty in Africa (using the
governments manage the COVID-19 contraction of growth, Africa could $1.90 international poverty line) could
infection rate well, according to updated lose between $145.5 billion and $189.7 reach 453.4 million in 2020 as a result
forecasts from the African Development billion of GDP in 2020, according to the of the pandemic, compared to 425.2
Bank, released in December. publication. million under the no-outbreak scenario.
In a comprehensive socio-economic The report calls for urgent policy The report comes as African countries
assessment of the pandemic’s impact, interventions to mitigate the impact are waiting with bated breath for the
the Bank said growth was now projected of the pandemic: “Across Africa, the Joe Biden administration and other
to rebound to 3% in 2021 from -3.4% in response must be well-sequenced rich economies under the G-20 to
the worst-case scenario for 2020. and multipronged, involving a public consider a proposal to allocate at least
The predictions are contained in a health response to contain the spread $200 billion held in unused reserves
supplement to the Bank’s African of the virus and minimize fatalities, at the International Monetary Fund
Economic Outlook, which was released a monetary policy response to ease to deal with the adverse impact of the
on 30 January 2020. At the time, Africa’s liquidity constraints and solvency risks, coronavirus on their economies.
growth was forecast at 3.9% in 2020 and and a fiscal response to cushion the Africa is currently staring at a pandemic
response funding gap of approximately
economic impacts of the pandemic on
4.1% in 2021.
The report cautioned that the growth livelihoods and to assist businesses.” $100 billion annually over the next three
years, according to initial estimates
Other proposed interventions included
outlook for 2021 and beyond would labour market policies to protect workers by the United Nations Economic
depend largely on African governments’ and their jobs, and structural policies to Commission for Africa (Uneca).
effectiveness in flattening the curve of enable African economies to rebuild and If approved, IMF funds made available
the outbreak and policies to reopen enhance their resilience to future shocks. under a major issuance of the IMF’s
economies. The report warned that the tourism, Special Drawing Rights (SDRs) –
The report noted that the curve of transportation, and entertainment reserves from central banks of all IMF
the pandemic in Africa was flattening sectors may take longer to recover. members – will provide additional
gradually. However, COVID-19 remains Between 2017 and 2018, African travel resources to cash-strapped governments
a serious threat to lives and livelihoods, and tourism grew by 5.6%, compared on the continent.
given weak healthcare systems and with the global average of 3.9%. However, given that SDRs are allocated
limited social protection. The continent According to the report, in the worst- in proportion to each country’s
also remains vulnerable to other regional case scenario, an additional 49 million shareholding (quota) in the IMF, what
threats such as the locust swarms that Africans could be pushed into extreme is required is for the largest shareholders
have struck East Africa, as well as to poverty by the pandemic and its of the bank to reallocate their unused

26 | The Nile Explorer 012