The International Monetary Fund (IMF) has attributed the recent Nigeria’s social protest, (EndSARS) to economic difficulties, saying that conditions in Nigeria for the last four years have been very difficult in the wake of the decline in oil prices in 2015-16.
“Since then, their growth has been quite anemic ” Abebe Aemro Selassie , Director, African Department, IMF said on Thursday during the October 2020 Sub-Saharan Africa Regional Economic Outlook Press Briefing, on the sidelines of IMF/World Bank virtual annual meetings in Washington D.C.
Selassie said there has been a lot of pressure on standards of living, “so there has been this dislocation and you know, as always when you have these kinds of economic difficulties, you know, social protests are not uncommon”.
“We are always, always concerned when we see protests. Particularly ones that are difficult like the ones in Nigeria at the moment. But also, anywhere in the world, right? So, we hope that there will be a satisfactory resolution there,” Selassie said.
In its October 2020 regional economic outlook, the Washington based Fund projects a modest growth of 3.1 percent for economies of sub-Saharan Africa in 2021.
The entire region is not expected to return to its 2019 level of output until 2022, and for some of the region’s largest economies, real GDP will not come back to the pre-crisis level until 2023 or 2024. This growth will translate into quite significant decline in standard of living, as measured by real per capita GDP, over 2020-21, a contraction of around five percent, which is significantly larger than most other parts of the world, the Fund said.
IMF said growth expectation for the region this year is broadly unchanged from June. It had in June forecast the regional economy to contract by 3.2 percent, double the contraction predicted in April.
The Fund said Sub-Saharan Africa faces significant financing gaps of $290 billion in three years. Much it said would depend on how private financing flows behave.
“If they were to remain below pre-crisis levels, and even taking into account existing commitments from international financial institutions and official bilateral creditors, the region could face a gap of as much as $290 billion, between 2020 and 2023,” Selassie said.
Closing this financing gap, the IMF said would require a combination of additional concessional financing, timely debt relief in those countries where debt is unsustainable, and transformative reforms to attract private investment.
Selassie was concerned that the Covid-19 pandemic really has been quite devastating to the region. In just a few months, he said the crisis has jeopardized years of hard-won development gains and upended the lives and livelihoods of millions of people in the region. Regional activity dropped abruptly and quite sharply in the second quarter.
“In more recent days, weeks, we’ve seen a cautious reopening of economies and more of a forward-looking policy posture to ignite growth, and, with the loosening of containment measures, somewhat higher commodity prices, and the easing of financial conditions, there are tentative signs of a recovery in the second half of 2020 ,” he said.
Selassie said, “want to stress that, you know, despite the crisis, the potential of the region, and the resourcefulness of African people remains intact and should enable recovery and development gains in the long run”.