The rising COVID-19 cases in Africa induced the Ministers of Finance from the continent to hold a second virtual meeting this Tuesday (31) when they decided that the pandemic could spiral out of control unless measures are put in place now to curtail its spread.
During the meeting – 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 – each nation 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 with recovery only expected after about 24 to 36 months.
The Ministers underscored that immediate focus must remain on the health and humanitarian front. They agree to continue the awareness-raising, testing, social distancing – many of them joined the meeting with masks.
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.
There is a fear for the commodity price drops coupled with increasing costs of imports is putting pressure on both inflation and the exchange rate. Also, they acknowledged the importance of the private sector for job creation and for the recovery effort.
That is why the Ministers called for the urgent and immediate release of the US$ 100 billion of which US$ 44 billion will go towards debt relief for all African countries. They also suggested that if the crisis were to continue, an additional $50 billion may be needed for the building back process in 2021.
A possible solution
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.
Strategic sectors
They call for the protection and preservation of the African airline, logistics and tourism industry. This is an important job-creating sector for millions of Africans and must be protected. The Ministers 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.
The first meeting of the African Ministers of Finance took place on 19 March 2020.