Published on October 2021, the IMF’s Sub-Saharan Africa Regional Economic Outlook captures challenges and opportunities ahead for the 46 Sub-Saharan countries.
What does it say about the Mauritian economy?
According to the October 2021 International Monetary Fund (IMF) Sub-Saharan Africa Regional Economic Outlook, Sub-Saharan Africa’s economy will expand by 3.7% in 2021 and 3.8% in 2022. “This follows a sharp contraction and is much welcome, but represents the slowest recovery relative to other regions,” wrote the authors of the report. The Mauritian economy, in contrast, will grow by 5% in 2021 and 6.7% in 2022.
Another Difficult Year Ahead
The IMF identifies the most significant immediate challenges for sub-Saharan Africa as the slow pace of vaccination and the rapid progression of the variants, including the Delta variants. Infections reached more than 210,000 per week-triple the January 2021 peaks in some African countries.
Although the world will produce over 12 billion doses, the IMF predicts that it will take another full year before sub-Saharan countries reach at least 60% of their population.
Without vaccines, the IMF fears that some countries in the region may have to resort to lockdowns to slow down the infection rates.
IMF Forecasts 5% GDP Growth Rate in 2021
The IMF considers Mauritius a Tourism-dependent country alongside Cabo Verde, Comoros, The Gambia, São Tomé and Príncipe, and Seychelles. Although the Fund observes that growth in the countries mentioned has returned to pre-pandemic levels, “these countries face permanent income losses as significant as 15 percent of GDP, especially in Cabo Verde and Mauritius”. However, “from a low base, tourist receipts have started to improve, assisted in some instances by large-scale vaccination programs, particularly in Cabo Verde and Seychelles.”
Avenues that tourism-dependent countries may explore to improve income include domestic carbon pricing. So far, only South Africa has implemented a carbon tax back( Since June 2019), while Ivory Coast and Senegal are still only exploring carbon pricing. Mauritius, alongside Botswana and Zimbabwe, are among those who tax fossil fuels, while Kenya, Malawi, Uganda, and Zambia have imposed taxes on energy-inefficient technologies.
Regarding economic indicators, following a 14.9% dip in 2020, the Mauritian economy will grow by 5% in 2021 and 6.7% in 2022. Government debt is expected to reach 101% in 2021 and drop to 99.8% in 2022. Reserves in terms of imports of goods and services will amount to 11.1 months in 2021 and 9.9 months in 2022.
