IMF predicts Africa will suffer three serious shocks from COVID-19

IMF predicts Africa will suffer three serious shocks from COVID-19

- The International Monetary Fund (IMF) has predicted that Africa could end up with three shocks from the COVID-19 epidemic

- It named them as dealing with economic disruptions, spillovers from global fallouts, and commodity price shocks

- The IMF also projected that Africa could deal with several external shocks such as trade and tighter global financial conditions

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The International Monetary Fund (IMF) has expressed fears about the effects of the coronavirus on the African continent.

According to the IMF, Africa is likely to end up dealing with economic disruptions, spillovers from global fallouts, and commodity price shocks.

Following the April 2020 virtual Spring Meetings on Sub-Saharan Africa, the IMF noted that the region is likely to see its lowest growth in history, which is 1.6%.

READ ALSO: COVID-19: IMF reveals 5 countries have pledged $11.7 billion dollars as aid for poor countries

Per a Business and Financial Times report, it added that this could come from first, disruptions in production as a result of workplace closures, disruption of supply chains, and reduction in labor supply because of sickness or death.

The report also shows that Africa continues to deal with several external shocks such as trade and tighter global financial conditions.

It added that the closure of factories and borders with key trading partners of African countries has disrupted supply chains, thereby, lowering the availability of imported goods.

Aside from these, it has been projected that there would be a fall in capital inflows into the region and this could lead to challenges in financing spending needs to deal with the health crisis and support growth.

It has also been projected that remittances to Africa may fall in the wake of a slowdown in global growth levels.

Again, travel restrictions can severely hit particular sectors like tourism, hospitality, and transport.

Meanwhile, the World Bank, the International Monetary Fund (IMF) and other stakeholders, on Sunday, April 18, 2020, discussed the possibility of a quicker strategy on a response to the coronavirus in African countries.

Inputs were received from Cyril Ramaphosa, President of South Africa and chairperson of the African Union, Antonio Guterres, Secretary-General of the United Nations, Dr. Tedros Adhanom Ghebreyesus, Director-General of the World Health Organisation (WHO) among others.

Officials from the individual countries took the opportunity to outline their policy plans in line with the judicious use of resources.

READ ALSO: Countries have spent a total of $8 trillion to combat COVID-19

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Source: Yen

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