Sub-Saharan Africa’s Recovery Dampened by Weak Fiscals, Slow Vaccination

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On 24 February 2021, staff unloads the first shipment of COVID-19 vaccines distributed by the COVAX Facility at the Kotoka International Airport in Accra, Ghana's capital.The shipment with 600 doses of the vaccine also represents the beginning of what should be the largest vaccine procurement and supply operation in history. The COVAX Facility plans to deliver close to 2 billion doses of COVID-19 vaccines this year. This is an unprecedented global effort to make sure all citizens have access to vaccines. Anne-Claire Dufay UNICEF UNICEF Representative in Ghana and WHO country representative Francis Kasolo said in a joint statement: After a year of disruptions due to the COVID-19 pandemic, with more than 80,700 Ghanaians getting infected with the virus and over 580 lost lives, the path to recovery for the people of Ghana can finally begin."This is a momentous occasion, as the arrival of the COVID-19 vaccines into Ghana is critical in bringing the pandemic to an end,"These 600,000 COVAX vaccines are part of an initial tranche of deliveries of the AstraZeneca / Oxford vaccine licensed to the Serum Institute of India, which represent part of the first wave of COVID vaccines headed to several low and middle-income countries. “The shipments also represent the beginning of what should be the largest vaccine procurement and supply operation in history. The COVAX Facility plans to deliver close to 2 billion doses of COVID-19 vaccines this year. This is an unprecedented global effort to make sure all citizens have access to vaccines. “We are pleased that Ghana has become the first country to receive the COVID-19 vaccines from the COVAX Facility. We congratulate the Government of Ghana – especially the Ministry of Health, Ghana Health Service, and Ministry of Information - for its relentless efforts to protect the population. As part of the UN Country Team in Ghana, UNICEF and WHO reiterate our commitment to support the vaccination campaign and contain the spread

Fitch Ratings: The recovery of sub-Saharan African sovereigns from the pandemic shock last year is underway, but it is slowed by the weak state of public finances, Fitch Ratings says. The slow pace of Covid-19 vaccination programmes means that risks related to the pandemic also remain high.

Median GDP for sub-Saharan Africa (SSA) sovereigns rated by Fitch fell 2.6% in 2020, a more moderate decline than in any other major region. Recovery will bring median growth to 4.3% in 2021 and 5% in 2022, which is fairly modest considering the boost from the base effect, as growth is held back by challenging public finances. Median public debt in the region leapt to 68% of GDP in 2020 from 56% in 2019 and is likely to rise further to 75% in 2022.

Many SSA sovereigns will achieve ‘herd immunity’ only in late 2022 at the earliest, raising the risk of new and potentially more severe infections waves, although the impact on sovereigns could be softened by containment measures becoming more targeted.

Very supportive global financial conditions have mitigated the pandemic shock but gradually less supportive global financial conditions could lead to greater volatility complicating SSA market access. The region also benefits from global support initiatives, like a new Special Drawing Right allocation and the G20 Common Framework (CF), although a restructuring of debt to the private sector under the CF would likely qualify as a distressed debt exchange.

There were 12 downgrades of SSA sovereigns since April 2020, partly triggered by the pandemic. Challenges remain, as indicated by five SSA sovereigns on Negative Outlook (no Outlooks assigned at ‘CCC’ or below), but Fitch has revised the Outlooks on the ratings for Cameroon and Nigeria to Stable from Negative and the Outlook on Benin and Cote d’Ivoire is Positive.