Financing will be key to Africa’s Post Covid 19 Green Recovery.
Since the Covid-19 was declared a global pandemic in March 2020, by the World Health Organization (WHO), countries, societies, and individuals have struggled to respond to the its devastating effects on health systems, economies, trade, and human wellbeing.
While Africa has been spared the pandemic’s harshest health impacts, it has experienced a heavy economic burden.
The response and recovery to the continents post Covid 19 green recovery will heavily be dependent on finance. This is the key enabler of governments’ in the region’s ability to provide healthcare, support the economic recovery and for the private sector to resume their businesses.
The economic crisis caused by the pandemic has demonstrated the need to for Africa to rethink its development model, as the world contemplates emerging from the pandemic and aims to build back economies quickly following the current shock and ensure resilience against future ones.
A critical part of the recovery will be to figure out how policymakers, the private sector, and development partners can help formalise informal businesses and make the sector more resilient to future shocks.
Even as we focus on the post-pandemic recovery, progress toward the United Nations Sustainable Development Goals and the African Union’s Agenda 2063 must be the key guiding actors.
Prospective tools to attain this should factor in innovative financing for recovery and initiatives to manage emerging risk; putting in place social safety nets and other measures aimed at the most vulnerable; and partnerships to galvanize public and private investments.
Therefore, there is need to turn to longer-term recovery and the major hangover from these positive responses is concerns about debt sustainability.
Preceding Covid-19 crisis, five African countries were in debt distress (Eritrea, South Sudan, Zimbabwe, Gabon and Mozambique) with another 12 countries facing high risk of distress.
Given their tight budgetary constraints and limited access to finance from foreign markets, many African countries have turned to international financial institutions (IFIs), including the African Development Bank, as lenders of last resort.
IFI credit has supported health financing and sustained livelihoods during the pandemic.
These financial partners working should continue to find ways to revive economic growth and lessen debt burdens on development.
Chopped by
