• A promising regional recovery has been disrupted by the war in Ukraine. Last year, activity surprised on the upside, lifting projected growth from 3.7 to 4.5 percent. But the war has introduced a new and tragic development, with the result that growth in 2022 will slow to 3.8 percent.
• The new crisis comes on top of an already-protracted pandemic, and prospects for borrowing costs and global demand are increasingly uncertain, presenting policy makers with a challenging and complicated policy outlook—one with rising needs, greater risks, and fewer options.
• Aside from accelerating vaccination, policymakers face three immediate priorities: i) addressing the local impact of the war; ii) balancing inflation versus growth; and iii) managing exchange-rate adjustment.
• Also, looking beyond the current set of crises, decisive policy action is needed to enhance economic diversification, promote regional integration (including through AfCFTA), unleash the private sector’s potential, and address the challenges posed by climate change. In all these areas, continued international solidarity and cooperation will remain vital. Washington, DC: A promising regional recovery has been disrupted by the war in Ukraine .
The recovery in sub-Saharan Africa picked up in the third quarter of 2021 and held up despite the onset of a fourth COVID-19 wave at the end of the year. Estimated growth in 2021 has been revised upward from 3.7 to 4.5percent.
Tragically, however, this progress has been offset by recent events. The Russian invasion of Ukraine has triggered a sharp rise in commodity prices—straining the fiscal and external balances of commodity-importing countries and increasing food-security concerns across the region. As a result, economic activity is expected to slow to 3.8 percent this year , and is subject to an extraordinary range of risks, the International Monetary Fund (IMF) said in its latest Regional Economic Outlook for Sub-Saharan Africa .
“The war in Ukraine has already reshaped the near-term outlook for sub-Saharan Africa,” stressed Abebe Aemro Selassie, Director of the IMF’s African Department. “The shock to global commodity markets will add to inflation, hit the region’s most vulnerable households, exacerbate food insecurity, raise poverty rates, and possibly add to social tensions.
Source International Monetary Fund