Funding shortfall hampers Africa's revival

Sub-Saharan Africa needs significant additional funding to counter damage wrought by the coronavirus pandemic, bolster its economic recovery prospects and mitigate threats posed by climate change. That’s according to the World Bank which noted that the regional economy is expected to grow 3.3% in 2021, after contracting by an estimated 2% last year. In its latest Africa Pulse report, it raised its GDP forecast by one percentage point from its April report, largely due to better-than-expected commodity prices. However, Business Report notes that it said economic growth in sub-Saharan Africa will lag behind that of rich countries due the slow roll-out of Covid-19 vaccines, which leaves it vulnerable to new waves of infection, and fiscal constraints that weigh on stimulus measures. ‘Accelerating the economic recovery in sub-Saharan Africa requires significant additional financing,’ the lender said. ‘This is needed to narrow the unequal recovery path between rich and poor countries. In an environment of continued uncertainty around the coronavirus and its variants, an aggressive fiscal consolidation agenda is counter-intuitive and might prove detrimental for long-term growth.’ The bank urged the international community to give African countries more fiscal space by alleviating some of their debt burden.

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