IMF says Africa needs a cash injection of about $425bn to get over the economic effects of Covid-19

SUB-Saharan Africa needs to attract $245bn in investment over the next five years while the continent as a whole needs as much as $425bn if it is to recover from the debilitating impact of the coronavirus pandemic according to the International Monetary Fund (IMF).

Although Africa has been spared the worst of the Covid-19 pandemic clinically, the continent has been hit hard by its economic impact. African economies have suffered from the drop in the price of primary commodities, the reduction in global production,  a collapse in commerce and a dearth in exports.

Abebe Selassie, the director of the IMF’s African Department, said Africa needs a massive injection of capital to help boost spending in response to the economic effects of the pandemic, maintain adequate reserves and accelerate income convergence. He added that the issues would be discussed in May at the High-Level International Summit on Financing for Africa.

Mr Selassie also said Sub-Saharan African countries need to reinforce the recovery and nurture the region’s growth potential through bold and transformative reforms. These reforms include digitalisation, trade integration, competition, transparency and governance and climate-change mitigation.

He also said the immediate priority was to save lives, which would require more spending to strengthen health systems and containment efforts and cover vaccine procurement and distribution. According to Mr Selassie for the international community, ensuring vaccine coverage for sub-Saharan Africa was a global public good.

Mr Selassie  added: “Restrictions on the dissemination of vaccines or medical equipment should be avoided. Multilateral facilities such as Covax should be fully funded and excess doses in wealthy countries should be redistributed quickly.”