The  International Monetary Fund’s (IMF) in its most recently released 2021 World Economic Outlook (WEO), forecasted growth for Sub-Saharan Africa will print at 3.2% in 2021 trailing global growth forecast of 5.5%. According to the report, developing economies (where most SSA economies are classified) prospects are weaker than global average largely because of oil-exporting economies and tourism-based economies who are vulnerable to slow normalization of cross-border travel and subdued outlook for oil prices. Also, it expects the fallout of the crisis to push close to 90 million people into extreme poverty.  

For us, the IMF’s gloomy growth prospects for SSA economies were largely expected, and in line with our SSA economies’ outlook. In our opinion, inability to secure adequate vaccines to meet up with the minimum 70% population vaccination, limited wriggle room for policy decisions, elevated debt levels, and legacy economic challenges are key issues that we expect will drag SSA recovery in 2021.

According to the IMF, to support many SSA economies’ recovery, there would be a need to grant debt forgiveness. Many countries may have to restructure their liabilities considering limited revenue flow. The organization also stated the need for more prosperous economies of the world to support low-income countries in sourcing vaccines to improve inoculation rate. For us, we largely agree with the IMF’s opinion as we believe a lot of the recovery potential for SSA is hinged on vaccination levels. That said, we note that implementing appropriate policy responses and resolving longstanding economic bottlenecks is critical for long term economic sustainability.