IMF: Africa Needs $425 Billion to Recover From Covid-19 Pandemic

The International Monetary Fund (IMF ) has stated that Africa needs about $425 billion to recover from the Covid-19 Pandemic.

Speaking at the latest Sub-Saharan Africa Regional Economic Outlook in Abuja, Ari Aisen, IMF’s Resident Representative for Nigeria explained that African countries were at the risk of falling further behind in terms of development, now that the world economy was faced with unprecedentedly high energy and food prices.

He outlined the economic activities of Nigeria and Africa at large – revealing that the funds they provide have done a lot to help African countries, south of the Sahara by allocating $23 billion in SDRs and intending to re-channel an additional $100 billion in SDRs from rich countries.

He explained that Nigeria had access to as much as $6. 8 billion in facilities between 2020, in the wake of the COVID-19 Pandemic till date from the IMF.  Nigeria received $3. 4 billion in Special Drawing Rights and a similar amount as a loan from the Fund.

“with unrivaled potential for renewable energy and an abundance of minerals, a successful transition offers opportunities for diversification and job creation; ensuring the green transition is also a just transition,” he said.

However, Aisen noted that Africa needs $425 billion to recover from the COVID-19 pandemic, in addition to $30–50 billion per year for climate adaptation and $ 6-10 billion annually for commodity imports.

Furthermore, Aisen diverged into the oil sector, revealing that  Nigeria could pay out as much as N6 trillion in oil subsidies in 2022 if oil prices continue to rise and urgent actions are not taken to reverse the trend.

Investors King gathered that the amount is roughly a third of the N17.319 trillion federal government budget for 2022, with nearly N6.9 trillion in scheduled recurrent spending and N5.96 trillion in capital outlay.

According to him, with a monthly petrol subsidy bill of N500 billion, the country might end the year with a record N6 trillion subsidy.

He did, however, express optimism that if the Dangote Refinery can begin operations within the year as anticipated, it will assist reduce gasoline imports and subsidy burdens.