By Francis Ntow, GNA Special Correspondent, Bangkok
Bangkok, Oct 20, GNA – The IMF has warned that Sub-Saharan Africa faces a second year of deep aid cuts, with bilateral aid projected to fall 12 per cent in 2026, leaving the region critically exposed to shocks.
Bilateral aid to the region fell by about 26 per cent in 2025, the biggest single-year reduction, triggering an unprecedented aid shock across sub-Saharan Africa.
“Bilateral aid to the region is projected to fall by a further 12 per cent this year after a steep decline last year. That leaves the region with little room to absorb another shock,” Mr Zeidane, the Director of the African Department, said.
The Fund made the disclosure at the launch of its October Regional Economic Outlook Update for Sub-Saharan Africa, projecting a 4.5 per cent growth in 2026 and five per cent growth in 2027 for the region.
The cut would affect health, humanitarian relief, education and social protection, governance and budget support, infrastructure and energy, agriculture and food security, and climate adaptation, where Africa’s bilateral aid is concentrated.
Director Zeidane said governments now have minimal space to respond, noting that declining aid, high debt service and expensive market borrowing had reduced the region’s fiscal buffers.
He described Africa’s economic picture as “Resilient Growth, Clouded Outlook,” explaining that its resilience would not be an immunity, citing divergencies among oil-dependent and exporters.
“High oil, copper, and gold prices are cushioning for some exporters. By contrast, growth is slowing in non-resource-intensive economies while their external deficits are widening,” he stated.
To protect vulnerable households without further eroding fiscal space, he advised against broad fuel price relief, recommending targeted transfers to the poorest 40 per cent of the population.
He urged commodity exporters to save windfalls and repay costly debt, while importers maintained fiscal adjustment, protected essential services and investment, and allowed exchange rate flexibility where permitted.
On monetary policy, Mr Zeidane said many countries may need to tighten it to prevent temporary price pressures becoming persistent, adding: “Greater debt transparency and better debt management remain essential.”
The report highlighted artificial intelligence (AI) as a growth lever, noting that wider adoption in agriculture, education, health and government services could lift growth by more than four per cent points over the next 10 years.
He outlined three priorities for the region – protecting the vulnerable sustainably, safeguarding stability through debt transparency and better management, and sustaining reforms in power, digital connectivity, skills and business environment.
“The IMF will continue to support countries across the region, combining financial support, policy advice and capacity development tailored to their circumstances,” Mr Zeidane said.
Following recent aid cuts, the Organisation for Economic Cooperation and Development (OECD) recommended providers target scarce ODA grants to poorest countries, plan responsible, coordinated exits, and make remaining resources and wider policies work harder for development.
In Ghana, the 2025 USAID shutdown led to the Government directing the Finance Minister to urgently fill the shortfall of a US$156m total budget gap, with US$78.2m in health, covering malaria, maternal/child health, family planning, nutrition, HIV/AIDS, and ARVs.
The Government also removed the National Health Insurance Fund cap, allocating GHS34bn to health in the 2026 Budget, and launched free primary healthcare with digital/AI tools to detect fraud and expand rural access.
GNA
Edited by Agnes Boye-Doe
Reporter: Francis Ntow