Coronavirus has really plundered the world’s economy and exacerbated poverty to exponential proportions.
But current pressures to ease social and business restrictions, pose greater dangers to developing nations.
Gratuitously, former Minister of Finance and Special Envoy for Access to COVID-19 Tools (ACT) accelerator, Prof Ngozi Okonjo-Iweala is spear-heading a global campaign to mobilize assistance for Africa to mitigate the crises.
The sad news is that the pandemic, named COVID-19 is not ending soon, according to World Health Organization (WHO).
‘The virus is still spreading at an alarming rate.’
Director-General, WHO, Dr. Tedros Adhanom Ghebreyesus said ‘Covid-19 cases in Africa, Eastern Europe, Central and South America are witnessing upward trends. Some countries affected earlier are reporting a resurgence.
‘Most of the world’s population remains susceptible. Epidemics can easily reignite. One of the greatest dangers is complacency.’
This is a clear warning for governments and political leaders, particularly in the Global South, witnessing escalating tensions, over dwindling food supplies and basic amenities.
Many African countries including Nigeria, belong to this beleaguered bracket, hence the agitation for urgent solutions to mitigate current hardship.
This quagmire provides a veritable opportunity to explore and aggregate huge potentials in agriculture, tourism, education, manufacturing and technologies.
Africa is not resource-deficit, neither does it lack expertise to rescue it from this financial pit. What it lacks is the right leadership that will place the needs of citizens above greed and graft.
The region has had the unfortunate fate of being ruled by despots, with an uncanny pedigree for corruption and partisanship, detrimental to good governance and proficiency.
This is the bane of Africa. Until the electoral process is reformed to enable selfless leaders to emerge, the continent will continue to roll in its mire.
With the financial distress and market contractions especially in China, the region should embrace economic diversification, agricultural expansion and population control.
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According to Dr. Leticia Appiah, Executive Director Population Council of Ghana, Africa should reduce population growth rate to free up resources for optimal life.
‘Sub-Saharan Africa, contends with high fertility rates due to teenage pregnancy, child marriage and increased population rates,’ with a youth bulge.
Dr. Appiah, a member of Ghanaian National COVID-19 Taskforce and alumnus of Hubert Humphrey Fellowship said ‘this has resulted in high consumption, low life expectancy, weak productivity and poverty,’ which can be tackled by ‘implementing well-funded family planning programs.’
Experts are hunting for both short and long term financial interventions to avert further distress.
The ex-World Bank Vice President and a member of economic advisory group of International Monetary Fund (IMF) said ‘governments should diversify earnings through investing in tourism and creative sectors,’ as short-term measures.
‘Commodity-dependent economies, need to be less dependent on commodities such as oil and minerals. Prices vary due to business cycles. In the long term, restructuring will create more avenues for income-generation.’
Okonjo-Iweala, Board Chair, Alliance for Vaccine (Gavi) and fellow of the Africa Growth Initiative at the Brookings Institution and Coulibaly, a fellow and Director of the Africa Growth Initiative of same organization, with other experts are mobilizing global support for the region, because ‘the infection has spread rapidly. Unless the continent urgently receives more assistance, the virus will cut a deadly path, with grim consequences.’
They requested ‘for a two-year standstill on all external-debt repayments, both interest and principal. During this standstill, the G20 should task the IMF and World Bank with undertaking a debt-sustainability assessment and with considering further debt restructuring, to preserve or restore debt sustainability.’
‘With immediate debt relief, the governments can focus on protecting vulnerable populations, bolstering social-safety nets and supporting the private sector, especially small- and medium-size enterprises by paying these firms’ arrears and ensuring credit flow, to avoid a prolonged banking and economic crisis.’
Such measures, they argued ‘will preserve jobs. Without them, Africa could face an unprecedented human and economic catastrophe that could morph into even costlier political and social instability.’
They also called for immediate debt relief for them to create the fiscal space needed to respond to the pandemic.
Despite massive assistance from WHO and development agencies, ‘healthcare across the continent remains limited. One third of Africans cannot wash their hands regularly, because they lack clean water, they noted.
‘Millions of workers’ livelihoods are in jeopardy, because they have limited access to broadband connectivity or other opportunities to maintain basic incomes.
‘But the key challenge is resource. Africa needs an initial €100 billion in support, because sharp declines in commodity prices, trade, and tourism, are drying up government revenues. Investor pull-back from risky assets has pushed up the cost of borrowing in financial markets, limiting viable options for resource mobilisation.’
‘The average fiscal-support package announced by African governments amounts to a meagre 0.8 percentage of GDP, one-tenth of the level in advanced economies. The continent’s additional financing needs could rise to €200 billion.’
‘International and regional institutions are complementing national efforts. The African Development Bank (ADB)issued a €3bn ‘Fight Covid-19’ social bond, while the African Export-Import Bank has set up a €3bn credit facility.’
‘The World Bank, the IMF, the United States Agency for International Development (USIAD), the Global Fund, and Gavi have all announced support for developing countries.’
‘Still, global support for Africa has not gone far. We back the urgent call by IMF and World Bank for bilateral debt relief for low-income countries.’
‘Success in combating the pandemic in any country will be short-lived, until every country succeeds.’
‘Beyond the immediate responses, the pandemic and its economic fallout highlight the longer-term need to strengthen Africa’s health systems, diversify its economies, and broaden domestic revenue sources. Achieving these goals matters for the entire world.
‘The global system is as strong as its weakest link. The pandemic will only be beaten in rich countries when it is beaten everywhere else,’ they stressed.
Cheerily this plea is already yielding results, with influx of funds for the region’s COVID-19 support package.
As the world responds to this humanitarian call, Africa should also reform its political-cum-economic institutional framework.
. OJUKWU, a Hubert H. Humphrey Fellow and journalist writes from Lagos via [email protected]
