Nigeria and Africa’s economy has been projected to recover in 2021, but the region is expected to face some downside risks which might affect its growth from the economy decline of this year. According to the International Monetary Fund (IMF), financing will make or mar the ability of African countries to survive the twin shocks of 2020.
Sub-Saharan Africa, like any other region across the world, is suffering from health and economic crisis (twin shocks), however, developed countries in Europe, Asia and the United State have the ability to withstand the twin shocks – this shows in China’s economy recover in the third quarter, three months after its economy contracted.
But in Africa, the region’s economy is expected to decline by 3.0 percent in 2020, “Sub-Saharan Africa is contending with unprecedented health and economic crisis— one that, in just a few months, has jeopardized years of hard-won development gains and upended the lives and livelihoods of millions.
“The current outlook for 2020–21 is broadly unchanged from the June update, with activity in 2020 projected to contract by 3.0 percent, still the worst outcome on record.” This is according to IMF statement obtained by Equity News.
Africa Needs Urgent $900,000 In Next Three Years
In 2021, Africa’s economy is projected to recover by 3.1 percent, but to sustain this growth for the next three years, the region needs massive external or foreign financing of about $900 billion, but with the debt level of African countries, uncertainty surrounds the ability of African countries to obtain this fund – Nigeria has a debt of NGN31 trillion.
“For 2021, regional growth should recover modestly to 3.1 percent. This outlook is subject to some key downside risks, particularly regarding the path of the COVID-19 pandemic and the resilience of the region’s health systems.”
The IMF stated that out of the close to a trillion dollars needed, it is not known how the region will obtain between $130 billion and $410 billion of the fund, “These risks are compounded by uncertainty on the availability of external financing, with associated needs estimated at about $900 billion over 2020–23, the sources of which between $130 billion and $410 billion are unidentified.
“Overall, the region’s outlook will be shaped by the availability of additional financing and the transformative domestic reforms to promote resilience (including revenue mobilization, digitalization, and fostering better transparency and governance), lift medium-term growth, create opportunities for a wave of new job seekers, and progress toward the Sustainable Development Goals (SDGs),” the statement reads.
