Following concerns over a global spread of the Coronavirus (COVID-19), the International Monetary Fund (IMF) has cautioned that in its assessment of combating this epidemic, Sub-Saharan Africa possess the highest risk.
The Managing Director, IMF Mrs. Kristalina Georgieva speaking at the IMF and World Bank COVID-19 Press briefing in Washington DC yesterday said as part of contributions towards tackling this disease, the IMF has made available $10 billion to low income countries at 0 percent towards curbing the COVID-19.
Georgieva said: “We have done a quick assessment of countries of highest risk, because of combinations of four factors, week health systems, exposure to price shocks because of commodity export orientation, vulnerability due to spill-over impacts from other countries and limited fiscal space.
“It is unfortunately clear from this analysis that Sub- Saharan Africa presents a particular area of focus. We do have up to $10 billion available for low-income countries to tap in with zero interest rates and obviously we would prioritise countries especially in Africa that have already been faced with difficulties. And we have a trust fund that allows the low-income countries to pay their obligations to the IMF so they can use this fiscals space to fund priority investments.”
On his part, the Managing Director, World Bank Group, Mr. David Malpass said it was important for countries to vamp up proactive measures in ensuring it doesn’t spread and urged that all countries be on alert.
He said: “There is the need for countries to prepare themselves for disasters because they are all not all that rare and use prevention as the best starting point. And we do have countries that are better prepared for this crisis and are able to respond to the crisis more quickly and that is critical in avoiding the spread.”
Responding to the impact COVID-19 has had on oil-producing countries, the IMF boss urged that countries who rely on oil receipts should use monetary and fiscal buffers to reduce economic impact.
Georgieva said: “Oil producing countries have already been hit because of the drop in demand for oil and the oil prices. Crude oil price has already tumbled by more than 15 percent since the beginning of the year and translates to about $10 billion to loss revenues across the main oil exporters.
“What we are looking into is what it would mean in terms of growth impact. Most of the countries do have buffers and that is a good time to use those buffers. And we are recommending to everybody that they also need to focus on making sure that they prioritise health expenditures first.”
On global growth projections, she said the fund projects a slower growth level compared to 2019. “In terms of our projects, we unfortunately over the last week have seen a shift to a more adverse scenario for the global economy. We are working on updating our projections and we would come up with those in the next week in our world economic outlook update.
“Under any scenario we see growth in 2020 falling below the level in 2019. As long as we don’t know the duration of this outbreak, we would be in a higher uncertainty space,” she added.
