#Africa needs 100 billion US Dollars to fight #COVID19 say African Finance Ministers

MASSIVE BILL COMING AFRICA’S WAY AS THE CONTINENT FINALLY BEGINS TO SPEAK WITH ONE VOICE

(Posted 01st April 2020)

African Ministers of Finance held a second virtual meeting yesterday, Tuesday 31st of March, against the backdrop of rising COVID-19 cases in Africa which could spiral out of control unless measures are put in place now to curtail its spread. The meeting was hosted by Vera Songwe, Executive Secretary of the Economic Commission for Africa, and co-chaired by Ministers Tito Mboweni of South Africa and Ken Ofori-Atta of Ghana. The Ministers agreed of an urgent need for $100bn immediate emergency financing for COVID-19

Countries shared their experiences and also discussed opportunities for mutual support. While acknowledging the commendable policy measures taken by governments, the Ministers underscored that Africa’s economy is facing a deep and synchronized slow down and could take up to three years to turn the corner.

They stressed the need to take “all possible actions to slow down and bring the spread of COVID19 under control in the short term but acknowledged this is an uphill battle‘.

The Ministers agreed on the following key issues:

A) They underscored that immediate focus must remain on the health and humanitarian front. There is a need to continue the awareness raising, testing, social distancing. Many ministers joined the meetings with masks.

B) They called for debt relief from bilateral, multilateral and commercial partners with the support of the multilateral and bilateral financial institutions such as the IMF, the WBG, and EU, to ensure that African countries get the fiscal space required to deal with the COVID19 crisis. The call for debt relief, it was emphasised, should be for all of Africa and should be undertaken in a coordinated and collaborative way. They called for a special purpose vehicle to be created to deal with all sovereign debt obligations. Substantial drops in revenue from commodity price drops coupled with increasing costs of imports is putting pressure on both inflation and the exchange rate.

C) The need for a longer period for debt relief. Given that the global economy has entered a period of a synchronized slow down, with recovery only expected after about 24 to 36 months, development partners should consider debt relief and forbearance of interest payments over a 2 to 3-year period for all African countries, LICs and MICs alike.

D) The Ministers acknowledged the importance of the private sector for job creation and for the recovery effort. They called on DFIs to support private sector at this difficult time. In addition, since Africa is a net importer of pharmaceutical products, enabling local continental production could serve to protect some jobs and guarantee the supply of essential medicines during the crisis. Over 54 countries have banned exports of pharmaceutical products and the Ministers called for an end to these procedures.

Ministers called for joint protocols on border closures to allow for trade and humanitarian corridors. There is a need liquidity facilities, refinancing and guarantee facilities to support the private sector.

E) The Ministers discussed the enormous losses being incurred in the airline and hospitality industry. They called for the protection and preservation of the African airline, logistics and tourism industry. including by advocating for a stay on interest, lease and debt payments. This is an important job creating sector for millions of Africans and must be protected. The Ministers also agreed to set up a meeting for countries affected by transport and tourism losses due to the pandemic, in order to better plan on policies to combat the losses.

F) The Ministers welcomed the use of technology such as mobile phones to support awareness raising, identify communities in need and create accountability and governance mechanisms around the use of the stimulus. They asked the ECA to work with telecommunications companies to design a system to support these objectives.

Meanwhile has UNDP, the United Nations Development Programme, also outlined their concerns yesterday when the organization’s spokesperson related the following details:

The growing COVID-19 crisis threatens to disproportionately hit developing countries, not only as a health crisis in the short term but as a devastating social and economic crisis over the months and years to come.

Income losses are expected to exceed $220 billion in developing countries. With an estimated 55 per cent of the global population having no access to social protection, these losses will reverberate across societies, impacting education, human rights and, in the most severe cases, basic food security and nutrition.

Under-resourced hospitals and fragile health systems are likely to be overwhelmed. This may be further exacerbated by a spike in cases, as up to 75 per cent of people in least developed countries lack access to soap and water.

Additional social conditions, such as poor urban planning and overpopulation in some cities, weak waste disposal services, and even traffic congestion impeding access to healthcare facilities, may all add to the caseload.

This pandemic is a health crisis. But not just a health crisis. For vast swathes of the globe, the pandemic will leave deep, deep scars,” noted Achim Steiner, Administrator of the United Nations Development Programme (UNDP). “Without support from the international community, we risk a massive reversal of gains made over the last two decades, and an entire generation lost, if not in lives then in rights, opportunities and dignity.”

Working in close coordination with the World Health Organization (WHO), UNDP is helping countries to prepare for, respond to and recover from the COVID-19 pandemic, focusing particularly on the most vulnerable.

UNDP is already working to support health systems in countries including Bosnia and Herzegovina, China, Djibouti, El Salvador, Eritrea, Iran, Kyrgyzstan, Madagascar, Nigeria, Paraguay, Panama, Serbia, Ukraine and Vietnam.

A UNDP-led COVID-19 Rapid Response Facility has already been launched, funded by existing resources and capitalized with an initial US$20 million. This facility is disbursing through a fast-track mechanism enabling UNDP teams to offer immediate assistance to countries for their national response. UNDP anticipates a minimum $500 million need to support 100 countries.

CALL TO ACTION

UNDP has made a call to action to the international community to think beyond the immediate impact of COVID-19. The organization has emphasized the need for three priority actions: resources to help stop the spread of the virus, support to respond during the outbreak itself, and resources to prevent the economic collapse of developing countries.

As an immediate response, UNDP is building on the support it has been providing to China and other Asian countries to help strengthen their health systems. This includes helping them procure much-needed medical supplies, leverage digital technologies and ensuring health workers are paid.

At the same time, UNDP will support countries to slow the spread of the virus and to provide social protection for vulnerable populations, promoting a whole-of-government and whole-of-society response to complement efforts in the health sector.

In the longer term, UNDP will work with countries to assess the social and economic impacts of COVID-19 and take urgent recovery measures to minimize long-term impact, particularly for vulnerable and marginalized groups, and to help societies to recover better.

Tackling COVID-19 and its impacts will require partners who can work across systems and sectors and in contexts that are both complex and uncertain. With years of experience on the frontlines, this is what UNDP is designed to do. UNDP is fully operational in 170 countries and territories and focused on its COVID-19 response, mobilizing all its assets to respond to this unprecedented challenge

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