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Oliver Kazunga, Senior Business Reporter
THE International Monetary Fund (IMF) has projected that Sub-Saharan Africa’s economic growth rate would this year drop by a record low of -1,6 percent on the back of the adverse effects of the global pandemic Covid-19.

In its latest Sub-Saharan Africa regional economic outlook, the IMF said as in the rest of the world, the pandemic has precipitated an economic crisis in the region reflecting three large shocks to economic activity.

“As a result, the region’s economy is projected to contract by -1,6 percent this year-the worst reading on record, a downward revision of 5,2 percentage points from our October 2019 forecast,” said the institution.

IMF highlighted three large shocks to economic activity emanating from the strong containment and mitigation measures that countries have had to adopt to limit the spread of the Covid-19 outbreak.

This, it said, would disrupt production and reduce demand sharply.

“Plummeting global economic growth together with tighter global financial conditions are having large spillovers to the region, and the sharp decline in commodity prices, especially oil, is set to compound these effects by exacerbating challenges in some of the region’s largest resource-intensive economies,” said IMF.

In the forecast, the multilateral financial institution said across countries, the less diversified economies will be hit the hardest, reflecting the impact of lower commodity prices and containment efforts.

Among the non-resource-intensive countries, those that depend on tourism are expected to witness a severe contraction because of extensive travel restrictions, while emerging market and frontier economies will face the consequences of large capital outflows and tightening financial conditions, said IMF.

It said the large adverse shocks will exacerbate social conditions and aggravate existing economic vulnerabilities.

“The measures that countries have had to adopt to enforce social distancing are certain to imperil the livelihoods of innumerable vulnerable people.

“Given the limited social safety net available, people will suffer,” it said.

“Moreover, the pandemic is reaching the shores of the continent at a time when budgetary space to absorb such shocks is limited in most countries, thus complicating the appropriate policy response.”

If left unchecked, the IMF said the rapid spread of the virus will threaten to overwhelm the weak health systems.

By exacting a heavy human toll, and upending livelihoods while damaging business and governments balance sheets, the crisis is seen retarding the region’s growth prospects in the years to come. — @okazunga.