Drought to weigh on spending – IMF

Staff Writer

THE International Monetary Fund (IMF) says the current drought in southern Africa will put pressure on external balances and public spending.

From January 2024, several parts of Southern Africa experienced significantly below-average rainfall. 

Zimbabwe, Zambia, Malawi, Angola, Mozambique and Botswana received less than 20 percent of the typical rainfall expected for February, with devastating consequences for the population largely depending on rainfed agriculture.

The governments of Zambia, Malawi, and Zimbabwe have declared natural
disasters due to the El Nino-induced drought crisis. 

In its Regional Economic Outlook, the IMF said if the drought in southern Africa continues, the negative impact on the 2024 economic outlook could be significant in some countries.

The Bretton Woods institution said the drought will exacerbate the food insecurity situation, posing a major humanitarian challenge and weighing on productivity and economic prospects.

“…my heart goes out to the people of Southern Africa, Malawi of course, Zambia, Zimbabwe, Mozambique, parts of Mozambique also, and even further south. We are very worried about this shock just as the region was recovering from all of the effects of the pandemic and other shocks. This latest shock is a reminder of just the damage that climate change is bringing to the region,” the IMF director African Department Abebe Selassie said at a recent briefing.

The IMF said climate change is exacerbating sub-Saharan Africa’s struggles, weighing on agricultural yields and labor productivity in an already vulnerable region.

Last year, the hottest on record globally, hit the region hard. Malawi and Mozambique faced devastating cyclones, while long and severe droughts in the Horn of Africa gave way to sudden flash floods in November.

South Sudan’s prolonged floods have aggravated food scarcity. Parts of southern Africa are now suffering from an unprecedented drought, with the early months of 2024—a crucial period for cultivating crops—recording the lowest levels of rainfall in the last 40 years.

Over 2,7 million Zimbabweans require food aid due to prolonged dry spells resulting in complete crop failure in several areas.

In Zambia, the drought has impacted 9,8 million people with delayed rains and wilting crops leading to a national disaster declaration in February.

In Malawi, El Nino has affected close to 4,4 million people due to below-normal rain and high temperatures.

In central Africa, the Congo Basin has been experiencing its worst flooding in nearly six decades.

Overall, the IMF said these weather extremes take a heavy toll on human lives and stymie development, stretching government resources thin and leaving the most vulnerable to suffer disproportionately.

Meanwhile, the IMF said in Africa, growth will rise from 3,4 percent in 2023 to 3,8 percent in 2024, with nearly two-thirds of countries anticipating higher growth.

It said economic recovery is expected to continue beyond this year, with growth projected to reach 4,0 percent in 2025.

The lender warned that the funding squeeze continues.

“The region’s governments continue to grapple with financing shortages, high borrowing costs, and rollover risks amid persistently low domestic resource mobilisation. Significant debt repayments are looming this year and next. The financing challenges are forcing countries to cut essential public spending and redirect development funds to debt service, thereby endangering growth prospects for future generations,” the IMF said.

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