WASHINGTON - Africa's 2021 Growth Prospects: A puzzle of many pieces, is a report by
Dr Hippolyte Fofack, Chief Economist at Afreximbank.

The highlights of the report are as follows:

"The issuance by the IMF of additional Special Drawing Rights (SDRs) to inject liquidity into the global economy and ease balance of payment pressures was touted as the most cost-effective and low-risk global response to the economic crisis following the outbreak of Covid-19. In the short term, SDR issuance will reduce countries’ exposure to exchange rate volatility and liquidity constrains associated with elevated balance of payments pressures. Besides preventing liquidity crises from morphing into solvency crises, deploying additional SDRs will bolster investor confidence and strengthen Africa’s economic recovery. But the development impact of such a move will also be broad-based and long-lasting. It will benefit low-income DSSI- eligible African countries as well as those larger nations, like Nigeria and Kenya, that opted out of the G20 initiative to preserve access to international capital markets and will play a key role in the region’s recovery as major drivers of intra-African trade. The daunting risks facing Africa and the rest of the world make the issuance of additional SDRs even more urgent. Beyond providing a timely shot in the arm of the global economy’s incipient recovery, they will advance the AfCFTA’s implementation. This will involve bolstering investment in infrastructure, including climate-resilient energy infrastructure and broadband to help Africa leverage digital technologies to boost productivity growth and participate proactively in the reordering of global supply chains post-Covid-19. The issuance of new SDRs is an important part to the global recovery puzzle in the aftermath of the pandemic downturn, but it is not the only piece – a robust and synchronised global recovery needed to return to pre-pandemic GDP levels will remain elusive in the absence of a strong and well-coordinated international response that enhances cross-border spillovers and global development impact of individual actions through investment and trade linkages."

For the full report, visit: file:///Users/alibahaijoub/Downloads/Africa's%202021%20Growth%20Prospects%20-%20A%20puzzle%20of%20many%20pieces-2.pdf