Africa should open up its borders to aid in rebounding its economy after the covid-19 coronavirus pandemic and to reduce its dependence on the skewed global trading platform.
The continent of 1.2 billion people is the wealthiest in the world when it comes to natural resources but it remains the poorest due to various reasons including corruption and the debt trap.
To help propel the economy, the African Development Institute (ADI) notes that the continent has a great opportunity to grow from the coronavirus crisis.
Delegates at a webinar organised by ADI last month noted that the continent should not let the crisis go to waste but that it should help rethink and re-strategise for the continent’s recovery.
“This is an opportunity to rethink macro-economic policy in Africa. We should not go back to our old ways. The sense of urgency that is coming from the crisis must translate into accelerated action on things that will make our continent less dependent on others in times like this. We should aim not only to build back the economy, but to build back better,” the speakers recommended.
African leaders have been urged to use the urgency created by the pandemic to accelerate investments, regional integration and deepening local financial markets to withstand future shocks as envisaged under the African Continental Free Trade Area agreement (AfCFTA).
The covid-19 spread in Africa is straining the continent’s fragile health systems, economies, trade, cultures, societies and livelihoods. Africa’s public and private sectors, individuals and communities are struggling to respond to the pandemic amid commercial lockdowns and disruption of income sources.
It is estimated that Africa will require stimulus worth US$110-US$150 billion to provide social and economic relief to its economies in the wake of the pandemic.
The webinar, titled Enhancing Resilience in African Economies: Macro-Economic Policy Responses to covid-19 Pandemic in Africa, sought to address the implications for African economies as many nations scrambled together fiscal stimulus packages to avoid total economic collapse.
Panellists, including global leaders, researchers, academics, former finance ministers and central bank governors explored potential fiscal, monetary and governance reforms that would bolster the resilience of African economies.
Key recommendations that emerged include the need for innovative fiscal, monetary and exchange rate policies that focus on saving the livelihoods of citizens, rescuing thriving private investments, including small businesses, to protect jobs, and strengthening regional and national institutions to make them more independent, resilient and effective.
Another key recommendation is the need to strengthen health infrastructure across African countries, invest in STEM to equip countries for the digital economy and to build the capacity of member countries to implement existing policies and continental declarations already acceded to by them.
Africa’s youthful population is a big plus for the continent’s ability to withstand the covid-19 pandemic.
In just a decade, and with the largest youthful population in the world, the youth will command a formidable 37 per cent of the continent’s population making it even bigger than the proportion in China. Thus, every effort should be made to ensure that the continent taps into this resource to increase productivity.
To move the continent forward, the panellists recommended the creation of an Africa Group of 30, comprised of finance ministers and Central Bank governors to champion best-case macro-economic policy responses to persistent problems encumbering Africa.
In addition, government and business leaders must improve transparency and accountability to attract more investment inflows and donor assistance for inclusive development.
ADI is already developing a Public Service Delivery Index (PSDI) to help improve transparency and accountability in public service delivery in Africa, and will soon launch an African Public Finance Management Academy (PFMA) to help countries with prudential public finance management.
Source: The Exchange