Africa needs around $425 billion additional external funding to accelerate recovery: IMF

African countries will need additional external funding of around $425 billion, over the next five years to accelerate economic recovery, thd International Monetary Fund (IMF) Director of African Department has said.

For 2020, IMF estimated that the economy of sub-Saharan Africa will shrink 3.0 percent, but should then grow 3.1 percent for 2021 although this is a much slower pace than elsewhere in the world.

Speaking at the April 2021 economic outlook for Africa, Abebe Aemro Selassie, the head of the IMF’s African division said the priority for Africa is to reinforce the recovery and unlock the region’s growth potential with bold and transformative reforms.

These are more urgent than ever and include reforms to strengthen social protection systems, promote digitalization, improve transparency in governments, and mitigate climate change.

“An SDR allocation by the IMF would be an important step to providing liquidity to the most vulnerable Sub-Saharan African countries. However, meeting the region’s total needs will require significant contributions from all potential sources, private capital flows, international financial institutions, debt mutual support via ODA debt relief, and capacity development for countries to use these resources effectively,” he said.

Along with the international community, the IMF, over the last year, has, of course, moved swiftly to help cover some of the region’s emergency financing requirements like the Emergency Funding Facilities and the Debts Risk Suspension Initiative by the Group of 20 best economies (G20).

IMF recently projected Zimbabwe’s economic growth projection at 3.1 percent against government’s own 7.4 percent saying the country continues to have very limited access to external concessional support.

“The role of the international community and the crucial need for further support is important for growth in economies,” Mr Selassie said.

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