The IMF released a sobering Regional Economic Outlook (REO) for Sub-Saharan Africa last month. In 2020, the regional economy shrank by 1.9% and this year the IMF forecasts only 3.4% year-on-year growth for Sub-Saharan Africa compared to 5.8% for the world at large. As a result of this ‘great disruption’, the REO projects an additional US$425b external financing gap between 2021 and 2025, and calls on the international community to take note. The IMF argues, convincingly, that the challenges posed by the ongoing coronavirus pandemic cannot be ignored, particularly while the international distribution of vaccines remains such an uneven affair.
With that being said, it is equally important that we keep sight of the heterogeneity of economic prospects across African countries and time horizons, detailed in the same IMF analysis. South Africa together with Africa’s most resource dependent countries, particularly the oil exporters, are the ones where economic headwinds are expected to be most acute. However, more diversified economies like Kenya’s are on a different footing even now. Not plain sailing, but considerably better.
The region as a whole is set to gather pace over the medium term. For example, in 2021, only eight African countries are forecast to grow more quickly than the global average. But in 2022, that number increases to 27 and by 2023, it is 39 of the 46 Sub-Saharan African countries. Threaded through the anticipated recovery are international and local factors, such as stimulus in the developed countries, the resuscitation of global consumption and commodity prices, as well as resilience and the extension of pre-pandemic dynamics at home.