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$100bn needed to fix Africa economy after coronavirus effect- ECA

By Idowu Abdullahi,

The United Nations Economic Commission for Africa (ECA), has stated that in order to reverse the adverse economic effects of the global coronavirus pandemic on Africa, there is need for an immediate injection of $100 billion into the continent’s economy, which it said would act as a buffer and present a platform from which the economy would grow.

The commission explained that it had become imperative to give a boost to the African economy due to its existing imbalance in financing and funding measures, as well as the fact that the continent had been behind as regards to programmes aimed at realizing Sustainable Development Goals (SDGs) and Agenda 2063 targets even before advent of the novel viral pandemic.

It said that the African continent was already disadvantaged, and that its economic shortcomings had further been expanded and undermined by incidence of the global coronavirus pandemic, adding that such had necessitated the call for emergency funding of the African economy.

Speaking through a statement released to newsmen on Monday, ECA said, called for a coordinated response by world governments to cushion adverse effect of the novel virus on the economies of African countries and societies, adding that it expected nations and governments in the continent to also do all that they could to curtail further spread of the pandemic in their countries.

According to the economic commission, it was imperative that governments gained control over the novel infection through which they could also regain control of their countries’ economies and avert further economic damage from taking place.

The ECA, which said that it had made the call during a virtual African finance conference attended by Finance Ministers from the 54 countries in the continent, disclosed that the ministers had agreed to work together with aimed to overcome the global pandemic and rebuild Africa’s economy.

According to the United Nations commission, the attending ministers had expressed fears that absence of coordinated efforts by their respective governments would pose major adverse implications on the continent’s economy and that of their countries respectively,  considering that present economic forecasts for most African countries were being downgraded by two to three per cent due to the pandemic.

It revealed that some of the decisions which had been taken at the conference included the need for immediate healthcare response structures, as well as a need for a coordinated logistics model through the continent with the aim to aid prompt delivery of testing materials among others.

“In this regard, the ministers emphasized the need to work with the 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. Particular attention should be placed on fragile states and vulnerable populations, especially women and children and those living in informal urban settlements. Further, given the 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 and to provide direct support to the existing facilities”, the statement said.

On the need for an immediate emergency economic stimulus of $100 billion, the statement added that, “As such, the waiver of all interest payments, estimated at US$44 billion for 2020, and the possible extension of the waiver to the medium term, would provide immediate fiscal space and liquidity to the Governments, in their efforts to respond to the COVID-19 pandemic. 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 encouraging the use of existing facilities in the World Bank, International Monetary Fund (IMF), African Development Bank (AfDB) and other regional institutions,”

“The ministers also 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. A liquidity line should also 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”.

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