"Covid-19: AfDB makes policy recommendations for economic recovery and resilience of African economies"

" \n African economies generally contracted by 2.1 percent in 2020 as the Covid-19 pandemic disrupted economic activity across the continent forcing the continent to record its worst contraction in half a century. \n \n\n \n Africa's total debt which presently stands at 70 percent of GDP is further expected to climb by 10 to 15 percentage points in the short to medium term due to the enormous fiscal deficits incurred by governments as a result of Covid-19 crisis. \n \n\n \n According to African multilateral institution, the African Development Bank (AfDB), uncertainty surrounding the growth outlook for Africa remains high due to the dominance of certain downside factors that could derail the recovery of the continent. \n \n\n \n These downsides the Bank pointed out include the resurgence of COVID\u201319 infections, debt overhang, financial market volatility that impedes capital flows, low commodity prices, low tourism and remittances among others - all fueled by the pandemic. \n \n\n \n In view of that, the AfDB in its 2021 Economic Outlook Report\u00a0has made some policy recommendations to African governments to help support economic recovery as well as build resilience post the pandemic. \n \n\n \n The policy recommendations outlined by the Bank in its report centred on the health sector, monetary and fiscal support for economic recovery, structural transformation through digitilisation among others. \n \n\n \n The AfDB's policy recommendations are as follows: \n \n\n \n \u2022 Continuous support to the health sector to consolidate gains in the fight against the pandemic : It is not yet time for policymakers to be complacent in the fight against the virus. A second wave of the pandemic has occurred in several regions across the world. Countries must continue to make resources available for health care systems to cope with the virus and other preventable diseases. \n \n\n \n Routine public health campaigns\u2014such as child vaccination against polio and measles, treatment for malaria, maternity care, and treatment for other chronic diseases should not be disrupted because of an excessive focus on the COVID\u201319 pandemic. \n \n\n \n \u2022 Sustain monetary and fiscal support to underpin economic recovery : Where there is still fiscal space or access to liquidity, policymakers should maintain fiscal and monetary support until the expected economic recovery has fully materialized. Once the recovery has been achieved, governments need to commit to a credible path of fiscal consolidation to restore debt and fiscal sustainability. Where there is no fiscal space, policymakers should seek international support through grants and concessional loans to support the recovery. \n \n\n \n \u2022 Address issues of increasing poverty by expanding social safety nets and making growth more equitable : To avoid reversing more than two decades of progress on poverty reduction, policymakers must step up efforts to lift people from extreme poverty and increase the coverage and scope of social protection to aid the newly impoverished. Policymakers can take advantage of increasing digitalization to boost the effectiveness, reduce the cost, and expand the reach of social protection pro\u0002grams using in-kind support such as free food banks, medical supplies, and free housing. \n \n\n \n \u2022 Minimize the long-term implications of the pandemic on human capital accumulation : Whenever in-person learning is practical, policymakers should immediately open schools, with the appropriate safety protocols in place. When in-person classes are impractical, learning should continue using traditional print, radio, and TV media, and digital technologies such as smartphones and computers. \n \n\n \n \u2022 Scale up active labor market policies to retool the labor force for the future of work : Policymakers must scale up efforts to retrain and reskill the labor force as quickly and broadly as possible to facilitate workers\u2019 transition from low productivity, obsolete sectors, and jobs into new and emerging ones. \n \n\n \n They should encourage labor reallocation through job search and matching policies and establish public works as a source of training and experience for the new digital economy. Other active labor market policies include helping in the process of labor reallocation through job search and matching policies. \n \n\n \n \u2022 Accelerate structural transformation through digitalization, industrialization, and diversification: As the world continues to grapple with the COVID-19 crisis, Africa\u2019s policymakers must look ahead and build a more resilient future. To make Africa\u2019s economies more resilient, countries need to deepen structural reforms and diversify their productive base. Fostering resilience will also require adopting policies that create room to make quick changes and reforms that promote economic flexibility. \n \n\n \n Policymakers should accelerate the diversification of their economy\u2019s productive base through human capital development, promoting jobs in high-productivity sectors, intensifying reforms to improve the investment climate, and advanc\u0002ing digitalization. They should adopt policies that promote economic flexibility by strength\u0002ening macroeconomic stability, improving market flexibility, and enhancing political, social, and environmental governance. \n \n\n \n \u2022 Strengthen regional and multinational solidarity to enable shared and sustainable recovery : Africa\u2019s policymakers must continue to call for greater coordination among countries in the fight against the virus and in the provision of financial support to countries experiencing liquidity and debt challenges. \n "

"Covid-19: AfDB makes policy recommendations for economic recovery and resilience of African economies"

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