confidentially speaking
The Africa Confidential Blog
Africa’s Build Back Better plan
Blue Lines
Sceptics could be forgiven for thinking that the African Development Bank (AfDB) plans to launch a five-year Strategy for Economic Governance in Africa next week is like sending someone out in a typhoon armed with an umbrella. After the devastation of 2020, the continent's treasuries are being tested to the hilt.
The Covid-19 pandemic is becoming a human tragedy and economic calamity for Africa in the eyes of the IMF. It projects the global economy will grow by 6% this year but Africa's economies, on average, will grow by 3.2%.
The AfDB's 'master plan for building back better', will start from increasing budget deficits and borrowing more to boost growth and productivity. Already public debt in sub-Saharan Africa has jumped by more than 6% to an average of 58% of GDP in 2020, the highest since the turn of the century. Public debt in North Africa rose by 12% and last year averaged 88% of GDP. In East Africa and Nigeria, the emphasis is on ramping up tax collection and compliance. Just as important is the structural reform of public sectors, channelling more funds into health and education but also cutting inefficiency and patronage. At the heart of the AfDB's recovery plan is accelerating production and continental trade, but the region will also have to bargain harder on two core issues: access to vaccines and a comprehensive debt restructuring.
