African Finance Ministers have said that the continent needs an immediate emergency economic stimulus to the tune of $100 billion, in response to the social and economic impacts of COVID-19.
Speaking at a virtual conference coordinated by the Economic Commission for Africa, ECA, from Addis Ababa, Ethiopia, the ministers said that without coordinated efforts, the COVID-19 pandemic will have major and adverse implications on African economies and the society at large.
While calling for exchange of ideas by member-states on the efforts of their respective governments in dealing with the social and economic impacts of COVID-19, the Finance Ministers noted that even before the COVID-19 pandemic, Africa was already experiencing a huge financing gap in funding measures and programmes aimed at realizing SDGs and Agenda 2063 targets and goals.
They argued that original economic forecasts in most economies are on average, being downgraded by 2-3 percentage points for 2020 due to the pandemic.
They also emphasized that as part of immediate health response, there is the need for a coordinated response in the logistics and delivery of testing equipment.
Consequently, the ministers agreed that the various countries should work with the World Health Organization, WHO, and existing continental institutions, in particular, the African Union and Africa CDC, while making maximum use of existing systems and funding partners, such as the Global Fund.
The ministers also said special attention should be placed on fragile states and vulnerable populations, especially women and children and those living in informal urban settlements.
On the problems of limited health infrastructure and the fact that most of the pharmaceuticals and medical supplies consumed in Africa are imported, the ministers called on the international community to support the upgrade of the health infrastructure on the continent and also provide direct support to the existing facilities.
While calling for waiver of all interest payments on interest on borrowings by the countries, estimated at $44 billion for 2020, and the possible extension of the waiver to the medium term, the Finance Ministers expressed the hope that it would provide immediate fiscal space and liquidity to the various governments in their efforts to respond to the pandemic.
They said, “The interest payments waiver should include not only interest payments on public debt, but also on sovereign bonds.
“For fragile states, the ministers agreed on the need to consider waiving principal and interest and encourage the use of existing facilities in the World Bank, International Monetary Fund, IMF; African Development Bank, AfDB, and other regional institutions.
“In addition, the ministers underscored the need to support the private sector and protect the over 30 million jobs at risk, particularly in the tourism and airline sectors across the continent.”
In other critical sectors including agriculture, imports and exports, pharmaceuticals and in banking, the ministers agreed that all interest and principal payments on corporate debt, leases, extended credit facilities, refinancing schemes and guarantee facilities should be used to waive, restructure and provide additional liquidity in 2020.
They also requested that a liquidity line should be made available to the private sector to ensure the continuity of essential purchases and all SMEs that are dependent on trade can continue to function. These measures, it was agreed, must accompany a policy of opening borders for trade.
The ministers noted that Europe and the United States in particular, should build this into their package as part of their stimulus to their private and financial systems.