The COVID-19 pandemic continues to represent an unprecedented health and economic crisis, with costs that will be felt most keenly by the poorest segments of the world’s population, the International Monetary Fund (IMF) said in its latest Regional Economic Outlook for Sub-Saharan Africa.
“This is a fast-moving crisis” said Abebe Aemro Selassie, Director of the IMF’s African Department. “And recent developments suggest that the downturn will be significantly larger than we had anticipated only 10 weeks ago. The risks we highlighted in April all continue to be a concern, but the deterioration of the global outlook has been particularly striking. In line with this new outlook, and consistent with local high-frequency indicators, output in Sub-Saharan Africa is now projected to shrink by 3.2 percent this year, more than double the contraction we had outlined in April. Again, this is set to be the worst outcome on record.”
“On the pandemic, the growth rate of new cases has slowed slightly since April, and a number of countries have cautiously eased some of their containment measures. But region-wide, the pandemic is still in its exponential phase-Sub-Saharan Africa has recently exceeded more than a quarter of a million confirmed cases, and new cases are still doubling every 2-3 weeks. Given the region’s already-stretched healthcare capacity, the immediate priority is still to protect lives and to do whatever it takes to strengthen local health systems and contain the outbreak,” Abebe said.
He further added that on economic policies, sub-Saharan African countries have acted swiftly and aggressively to support the economy. “Monetary and prudential policies have been eased, with countries adopting a mix of reduced policy rates, added injections of liquidity, greater exchange-rate flexibility, and a temporary relaxation of regulatory and prudential norms, depending on country circumstances.”
On the fiscal side, however, country responses have often been more constrained he said. “Even before the crisis, debt levels were elevated for many countries in the region. In this context, and in light of collapsing tax revenues, the ability of governments to increase spending has been limited. To date, countries in the region have announced COVID-related fiscal packages averaging 3 percent of GDP. This effort has been indispensable. But it has often come at the expense of other priorities, such as public investment, and is markedly less than the response seen in other emerging markets or advanced economies.”
Also, authorities in sub-Saharan Africa face a distinct challenge in getting support to those who need it most. Around ninety percent of non-agricultural employment is in the informal sector, where participants are usually not covered by the social safety net. Moreover, a large proportion of this activity centers on the provision of services, which have been particularly hard hit by the crisis. Further, informal workers typically have few savings and limited access to finance. So staying at home is often not an option; complicating the authorities’ efforts to maintain an effective lockdown. In response, many authorities have done what they can to temporarily expand their safety nets; using home-grown, often innovative approaches to ensure that transfers reach as much of their population as possible. But again, resources are limited, and these efforts cannot hope to offset the full impact of this crisis.
“In sum, many authorities in Sub-Saharan Africa face a particularly stark set of near-term policy choices; concerning not only the scale of support they can afford, but also the pace at which they can reopen their economies,” he added.
Against this backdrop, Abebe pointed to a number of policy priorities going forward.
“First and foremost, the immediate priority remains the preservation of health and lives. But as the region starts to recover, authorities should gradually shift from broad fiscal support to more affordable, targeted policies; concentrating in particular on the poorest households and those sectors hit hardest by the crisis.”
“Looking even further forward, and once the crisis has waned, countries should refocus their attention on transforming their economies, creating jobs, and boosting living standards-clawing back some of the ground lost during the current crisis. As before the crisis, part of this effort will require putting fiscal positions back on a path consistent with debt sustainability; which will in turn require a renewed determination to implement revenue-mobilization, debt-management, and public financial management reforms. In addition, sustainable, job-rich, and inclusive growth will require private-sector investment, along with a business environment in which new ideas and projects can flourish, and where new opportunities (such as from the digital revolution) can be developed fully,” Abebe added.
“None of this will be easy, particularly in light of the scale of the crisis and its longer-term consequences,” he further noted. The region cannot tackle these challenges alone, and a coordinated effort by all development partners will be key. The IMF has modified the Catastrophe Containment and Relief Trust (CCRT) to provide immediate debt service relief for its poorest and most vulnerable members, and has also doubled its emergency lending facilities. So far, 29 countries in the region have received around $10 billion in funding through these facilities, or through expanded access under existing programs. In April, the G20 also announced the Debt Service Suspension Initiative (DSSI), which allows the world’s poorest countries-most of them in Africa-to suspend up to US$14 billion of debt service payments due between May and December this year.
“Nonetheless, more international support is needed urgently. This year alone, countries in the region will face additional financing needs of over $110 billion, and despite the efforts outlined above, $44 billion of this has yet to be financed.”

Debub Global Bank announced the appointment of Fekadu Shegute as Vice President Operations commencing from June 29, 2020.
Fekadu assumed the position of Vice President Operations after approved by the National Bank of Ethiopia. Fekadu was serving the bank as Acting VP-Operations for few months before the national bank willed his promotion.
Academically, Fekadu meets the requirement for the position holding Master of Commerce from Indira Gandhi University in June 2016 and Business Education from Addis Ababa University on August 31, 2006.

Renewable energy sources can play a crucial role to ensure health, food and education to the African population in the Covid-19 recovery phase. This is the outcome of the study “The impact of Covid-19 on Africa’s energy sector”, developed by RES4Africa Foundation and the United Nations Economic Commission for Africa (UNECA), in partnership with SDA Bocconi and with the support of the Southern African Power Pool (SAPP) and Ethiopian Women in Energy (EWiEn). The study was presented during a virtual event, which saw the participation of relevant representatives of the European and African energy sector, international agencies and organisations.
Even if the spread of Covid-19 is lower than in other continents (2.67% of global infections and 1.2% of the global death rate), the research shows that the pandemic heavily impacted Africa’s economies, that are suffering severely for their dependency on other economies, by the collapse of commodity prices and for the shutdown of commercial activities in response to the lockdown measures. As a result, the 2020 African GDP growth rate is expected to decline from 3.2% to 1.8% (with a contraction of 1.4%); however, if the shock level is heightened, the GDP contraction could reach up to 2.5%. This slower growth of Africa’s economies will have major implications on poverty reduction and employment growth, possibly causing from 5 to 29 million people falling back into extreme poverty.
In such a time of crisis, electricity access plays a fundamental role in securing basic needs and services such as health, food and education; however, the impact of Covid-19 on the African energy industry is likely to have dramatic effects on the progress made in recent years in expanding access to energy. The global economic crisis that causes a decrease in energy consumption makes it harder for existing customers and businesses to pay for their energy services and African utilities, some of which were already in difficult financial situations, may further struggle to run their business. At the same time, slowed supply chains and reduced investment flows are causing energy companies to run out of cash, putting many jobs at risk and reducing the customers’ access to energy.
The RES4Africa-UNECA study explains in detail that, in this scenario, the deployment of renewables-based solutions can be a pivotal contribution to Africa’s post-Covid recovery and to improve the quality of life of millions of people, even long after the end of the pandemic. African leaders and policy makers face a historical opportunity to coordinate their recovery initiatives in response to the pandemic in order to increase their efforts in achieving the Sustainable Development Goal 7: this implies building more robust and efficient energy infrastructure systems as well as implementing decentralised energy solutions using renewable energy sources.
“In this emergency, we must take the opportunity to rethink global systems and accelerate towards an economy that is more sustainable and more attentive to everyone. It’s time to finally unlock Africa’s potential and provide renewable energy to its population” states Antonio Cammisecra, President of RES4Africa Foundation and CEO of Enel Green Power, “Covid-19 is not a signal to slow down, but a signal to speed up”.
“The investments in sustainable energy will help mitigate the impact of climate change, while widening access to energy” continues William Lugemwa, Director of the Private Sector Development and Finance Division of the UNECA, “It will be essential, thanks to the economic and financial stimulus that will follow this crisis, to build and strengthen the energy system in a clean and sustainable way, pursuing a deep de-carbonisation and to prepare a more resilient socio-economic system to external shocks such as Covid-19”.
“Placing renewable energy at the heart of Covid-19 recovery measures is crucial to bridge the energy access gap and build a resilient and sustainable economy” comments Rabia Ferroukhi, Director Knowledge, Policy and Finance of the International Renewable Energy Agency (IRENA), “With the right policy frameworks in place, investments in renewables will bring much needed jobs, GDP growth and welfare gains – key to Africa’s long-term prosperity”.
“The IEA’s new Sustainable Recovery Plan shows it is possible to simultaneously spur economic growth, create millions of jobs, put emissions into structural decline and provide a substantial boost to the resilience of energy systems” adds Maximilian Jarrett, Africa Programme Manager of the International Energy Agency (IEA), “It’s a plan that could significantly benefit the energy sector and wider economy across Africa”.
“Renewables, thanks to their decreasing costs and greater resilience, as demonstrated during the coronavirus pandemic, are helping with the energy transition on a global scale, enabling society to make progress on several of the seventeen Sustainable Development Goals” concludes Matteo Di Castelnuovo, Professor of SDA Bocconi and Director of its Africa Lab.