(Adds comments on virus disruptions, oil prices)
By David Lawder
WASHINGTON, March 25 (Reuters) - The spread of the
coronavirus into sub-Saharan Africa will hit the region's
economic growth hard, with direct disruptions to people's
livelihoods, tighter financial conditions, reduced trade and
investment and a steep drop in commodity prices, the
International Monetary Fund said on Wednesday.
In a blog posting on the IMF's website, top officials in the
Fund's Africa Department said they have received requests for
emergency financing from over 20 nations in the region and
expect at least 10 more soon.
On Tuesday, the Fund announced that Ghana had requested a
rapid-disbursing emergency loan to fight the coronavirus
pandemic.
IMF Managing Director Kristalina Georgieva on Monday said
some 80 countries had requested loans from emergency facilities,
under which some $50 billion is available, with at least 20 more
requests expected.
"Across the region, growth will be hit hard. 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," Abebe Aemro Selassie, director of the IMF Africa
Department, and Karen Ongley, mission chief for Sierra Leone,
wrote in the blog posting.
During the global financial crisis more than a decade ago,
African countries were spared the brunt of the economic impact,
because many were less integrated with global financial markets
and supply chains, Selassie and Ongley wrote. Debt levels were
lower too and countries had more room to increase spending to
boost growth.
In the coronavirus pandemic, a number of countries have
closed borders and limited public gatherings, which will cut
many off from paid work.
"For society's most vulnerable in the region, 'social
distancing' is not realistic. The notion of working from home is
only possible for the few," Selassie and Ongley wrote.
IMPACT ON OIL EXPORTERS
The disruptions to livelihoods will mean less income, less
spending, and fewer jobs. Closed borders mean that travel and
tourism will dry up, along with trade and shipping.
The partial shutdown of major economies means that global
demand will fall, further disrupting supply chains and trade.
And tighter global financial conditions will limit access to
finance and delay investments and development projects, they
wrote
With oil prices down 50% since the start of 2020, the impact
on oil exporters in Africa will be substantial.
"We estimate that each 10% decline in oil prices will, on
average, lower growth in oil exporters by 0.6% and increase
overall fiscal deficits by 0.8% of GDP," they wrote.
Nonetheless, they recommended increased fiscal spending -
first on public health, but also to provide broad economic
support, including cash transfers to individuals and households
under strain.
"Where feasible, governments should consider targeted and
temporary support for hard-hit sectors such as tourism. For
instance, temporary tax relief through targeted reductions or
delays in paying taxes could help address cashflow shortfalls
for affected businesses," they wrote.