The economies of Ghana and sub-Saharan African countries are facing a triple threat from the Coronavirus pandemic, meaning revenues will take a significant nosedive.
The International Monetary Fund is, therefore, calling for rapid spending in order to reduce the impact of the pandemic the citizens and economies of those countries.
In an article written by Karen Ongley, the IMF’s mission chief for Sierra Leone, and Abebe Aemro Selassie, Director of the IMF’s African Department, the IMF said sub-Saharan economies will be the hardest hit.
Africa largely depends on aid from not only the Bretton Wood institutions but also Europe, America and Asia for economic funding.
“Precisely how hard is still difficult to say. But it is clear that our growth forecast in April’s regional outlook will be significantly lower,” they say.
“The slowdown will mean revenues take a hit, just as countries face additional public spending needs.”
The sub-Saharan economies also face three related threats.
First, measures that have been introduced to slow the spread of the virus will have a “direct cost on local economies”.
This means: “The disruption to people’s daily lives means less paid work, less income, less spending, and fewer jobs. And, with borders closed, travel and tourism are quickly drying up, and shipping and trade are suffering,” the authors stated.
Secondly, projected slowdowns in major global economies will see world demand fall for goods.
That suggests that: “Countries are likely to also see delays in getting investment or development projects off the ground.”
Finally, the sharp decline in commodity prices will hit oil exporters hard.
“The price of oil has tumbled to levels not seen in decades. We don’t yet know where they will settle, but with oil prices already down by more than 50 per cent since the start of the year, the impact will be substantial.”