© 2019 - International Centre for Investigative Reporting
REPORT: Decisive policies can reduce post COVID-19 impact on African economies
BROOKINGS report highlighted how Subsaharan countries can mitigate the post-impact of the novel COVID-19 virus through strong and decisive policies that will help avoid widespread sovereign defaults, contagion, and chaos in the sovereign debt markets.
Policymakers in advanced economies have, appropriately, thrown out stale policy practice and making strategic changes, and the same approach should be taken for the African countries, the report stated.
The Governor of the Central Bank of Nigeria (CBN) Godwin Emefiele said “Nigeria must look inwards as a nation and guarantee food security, high quality and affordable healthcare, and cutting-edge education for it people.”
“For a country of over 200 million people, and projected to be about 450 million in a few decades, we can no longer ignore repeated warnings about the dangers that lie ahead if we do not begin to depend largely on what we produce locally”, he added.
It will also help preserve millions of jobs in the continent, avoid widespread political and social unrest………..0 and prevent insecurity and mass migration.
According to the report, with the benefit of immediate and substantial relief, African governments can now better focus on vulnerable populations and bolster safety nets, and like elsewhere in the world support the private sector.
Especially Small & Medium Enterprises (SMEs), including paying arrears and ensuring minimal disruption to the flow of credit thus avoiding deeper and more prolonged banking and economic crises.
African countries should also engage their technology hubs to help build an information database to track, monitor, and evaluate the use of these funds.
Effective and balanced partnerships with Non-Governmental Organisations (NGOs) and technology platforms can ensure resources reach those most in need expeditiously, the report showed.
The Brookings report highlighted that the share of these resources going to African countries falls significantly short of the $200 billion needed, as estimated by the African Union, and the debt standstill does not go far enough in its scope.
According to the report, to truly empower African countries to effectively fight the virus and shore up the economies, we recommend the following next steps;
Expand the eligibility for a debt standstill, set up a process to ensure increased private creditors participation, leverage special drawing rights and strengthen governance around the utilization of mobilised resources.
Development banks should be adequately capitalised so that they can leverage that capital to play a bigger role in infrastructure financing, the report showed.
Their involvement will alleviate pressures on national government budgets and the buildup of debt.