Sub-Saharan Africa is facing an unprecedented health and economic crisis. One that threatens to throw the region off its stride, reversing the development progress of recent years, this is as far as International Monetary Fund-IMF is concerned.

Furthermore, IMF in its survey that was published this week, it says, "by exacting a heavy human toll, upending livelihoods, and damaging business and government balance sheets, the crisis could retard the regions growth prospects in the years to come.No country will be spared."

The rapid spread of the virus, if left unchecked, is threatening to overwhelm weak healthcare systems it adds. 

The number of confirmed cases of COVID-19 in sub-Saharan Africa is growing rapidly. As in the rest of the world, the health crisis has precipitated an economic crisis in the region reflecting three large shocks to economic activity: The strong containment and mitigation measures that countries have had to adopt to limit the spread of the COVID-19 outbreak will disrupt production and reduce demand sharply.

Plummeting global economic growth together with tighter global financial conditions are having large spillovers to the region; and the sharp decline in commodity prices, especially oil, is set to compound these effects, by exacerbating challenges in some of the region's largest resource-intensive economies. 

IMF in its survey said, "As a result, the region's economy is projected to contract by 1.6 percent this year—the worst reading on record, a downward revision of 5.2 percentage points from our October 2019 forecast."

Across countries, the less diversified economies will be hit the hardest, reflecting the impact of lower commodity prices and containment efforts. Among the non-resource-intensive countries, those that depend on tourism are expected to witness a severe contraction because of extensive travel restrictions, while emerging market and frontier economies will face the consequences of large capital outflows and tightening financial conditions. 

The large adverse shocks will exacerbate social conditions and aggravate existing economic vulnerabilities. The measures that countries have had to adopt to enforce social distancing are certain to imperil the livelihoods of innumerable vulnerable people.

Given the limited social safety net available, people will suffer. Moreover, the pandemic is reaching the shores of the continent at a time when budgetary space to absorb such shocks is limited in most countries, thus complicating the appropriate policy response.

SOURCE: International Monetary Fund