Participants at the ninth African Fiscal Forum discussed today (Tuesday, March 2nd) how Sub-Saharan African countries continue to grapple with an unprecedented health and economic crisis, and how the pandemic has jeopardized years of hard won development gains and upended the lives of millions of people. The Forum also provided an opportunity for participants to consider the relevant fiscal reforms that are required to spur recovery in the region.
The Forum was hosted by the International Monetary Fund and the European Comission. The panel of speakers consisted of Kristalina Georgieva, Managing Director of the IMF, who was joined by Jutta Urpilainen, Commissioner for International Partnerships at the European Comission,Vera Daves de Sousa, Minister of Finance in Angola, Amadou Hott, Minister of Economy, Planning, and Cooperation in Senegal, Albert M. Muchanga, Commissioner for Economic Development, Trade, Industry and Mining Representing the Chairperson of the AU Commission, and Tidjane Thiam, African Union Special Envoy for COVID-19
The roundtable identified the resulting short-term and medium-term fiscal challenges faced by countries in sub-Saharan Africa, and highlighted the necessary BRAVE fiscal reforms (Bold, Revenue based, Anchored, Vaccine compatible and Equitable) to address them.
“We are in this together. What it meant for us in the Fund is very swiftly to step up support for countries because it was clear that financial lifelines for countries that do not have the same or any access to markets is going to make a huge difference, and we have done in sub-Saharan Africa somewhere between 13 and 16 times more than we normally would do in an average a year, depending on which count of countries one takes. And I believe very strongly that 2021 is going to be equally important and difficult year, and we would need to strive to build forward our economies,” said Georgieva.
Amadou Hott, the Senegalese Minister of Economy, Planning, and Cooperation shared his country’s experience with the pandemic and how they managed to create the fiscal space to deal with the costs of the pandemic.
“We have to make some difficult choices. One of the biggest the difficult choice, I would say, is really the arbitration to postpone some of the investments that we were supposed let's say to do in 2020 and we decided to postpone to create the fiscal space necessary to deal with the consequences of the pandemic,” said Hott.
On the other hand, Vera Daves de Sousa, Angola’s Minister of Finance highlighted how Angola has been dealing with recession for the past 5 years and is currently taking advantage of IMF’s Debt Service Suspension Initiative and how they are looking at this crisis as an opportunity to acknowledge their vulnerabilities and manage them given their limited fiscal space.
“We work a lot. I think we take advantage of this crisis. We see it as an opportunity. We take this opportunity to increase the digitalization of the process, making the public administration more efficient. We still have some challenges regarding the schools, the digitalization of the schools to make sure that even with the lock down and the kids still having access to education, we need to keep working on that. And we had also the opportunity to identify our vulnerabilities, the vulnerabilities on our health system. We addressed some of them, but we still have some vulnerabilities to address. The challenge now is how to manage all these challenges with the limited fiscal space that we have,” said Daves de Sousa
MD Georgieva concluded the Forum by sharing how optimistic she is towards sub-Saharan Africa’s future and urged decision makers to push for full debt transparency to attract investors.
“I am optimistic about Africa's future. Why? Because it is youthful continent where leaders stepped forward in so many places and some of these leaders are on this call, but Africa would succeed only if Africa believes in itself enough to be fully transparent on every possible issue with the rest of the world,” said Georgieva.
To watch the full event, click here