23-Jun-2021
Following the onset of the Covid-19 pandemic, Africa experienced its worst recession in half a century in 2020. GDP contracted 2.1 percent, in contrast to the 4 percent growth rate that had been projected before the crisis. This year, Africa's economic growth is forecast to recover to 3.4 percent, and, in the medium term, higher still. However, recovery remains conditional on equitable access to Covid-19 therapeutics and vaccines, a continued rise in commodity prices, and a sustainable resolution to Africa's growing debt burden.
The African Development Bank responded quickly and proactively to support its members' efforts to mitigate the impacts of the pandemic. The Economic Governance and Knowledge Management Vice-Presidency (ECVP) provided the knowledge base for these efforts. The Complex led the quick roll-out of the Bank's Covid-19 Response Facility. Approvals through the Facility totaled roughly $4.07 billion or about 69 percent of total approvals. Budget support operations amounted to about $3.61 billion and accounted for 89 percent of all operations funded through the Covid-19 Response Facility.
The ECVP Complex has also been advancing its mandate to position the Bank as Africa's premier knowledge institution. In 2020, ECVP launched Global Community of Practice (G-CoP) seminars to spur policy dialogue on the impact of Covid-19 and inform policies for recovery during and after Covid-19. The Complex hosted six G-CoP seminars which preferred policies for building resilience in key sectors of Africa's economies. It convened over global 3,500 experts to provide sector-specific policy guidance to countries. These included macro-economic policies for building resilient economies; building resilience in food systems and agricultural value chains; building an inclusive one-health system; enhancing resilience and transparency in public and private finance management, financing natural capital and value chain development in the natural resources sector; and strengthening institutional capacity for inclusive growth and sustainable development.
In July 2020, ECVP published a supplement to the 2020 African Economic Outlook and country-specific notes addressing the impacts of Covid-19 on African economies. The AEO supplement marked a strategic decision by the Bank to address African countries' debt challenges, which have been exacerbated by Covid-19.
Subsequently, the theme of the 2021 African Economic Outlook was From Debt Resolution to Growth: The Road Ahead for Africa. The report proffers growth-friendly policies that have the potential to diversify economies, accelerate digitalization, and promote free and fair competition, and stresses the need for bold action to improve enhance debt productivity and amplify the link between debt-financed investment and growth returns. This includes spending more efficiently, eradicating leakages in public finances, and improving transparency and accountability in debt management. The Bank's African Development Review also published a special issue with 16 papers on the impact of Covid-19 on African economies.
The Bank approved the Strategy for Economic Governance in Africa 2021-2025, and is in the final stages of processing its Capacity Development Strategy 2021-2025 and its multi-dimensional Debt Action Plan 2021-2023 for consideration and approval by its Board of Directors. These strategies provide the framework for the Bank's integrated efforts to work with its partners to support Africa's recovery.
Looking ahead, the Complex will focus on strengthening resilience in the three key pillars of sustainable development: the economic, the social and the environmental. Triangulating these components of sustainability will help to build inclusive and resilient economies in Africa. The knowledge events of the 2021 Annual Meetings of the Bank are designed to provide deeper insights into how Africa can build back better and bolder beyond Covid-19, and set its countries to an inclusive, green, and resilient development path.
About the author
Prof. Kevin Chika Urama is Senior Director of the African Development Institute/OIC Chief Economist and Vice President, ECVP, African Development Bank Group.
E-mail: k.urama@afdb.org.
