CAN AFRICA BEAT A LOOMING RECESSION IN 2022
CAN AFRICA BEAT A LOOMING RECESSION IN 2022
The COVID-19 pandemic brought unprecedented disruptions to Africa—reducing earnings and increasing poverty and food insecurity as well as leading the region into its first recession in 25 years.
New predictions from the World Economic Forum suggest that the global economy is set to face a recession by 2022. The implications of such a downturn would be far-reaching, with Africa being hit especially hard. However, there are steps that African governments can take now to prepare for any potential economic collapse in the coming years.
- TRADE, NOT AID:
This is the economic idea that the best way to promote economic development is through promoting free trade and not providing direct foreign aid. The commencement of trading on the African Continental Free Trade Agreement (AfCFTA) in January 2021, Africa is sending a powerful message to the world: Africa is open for business. This time around, Africa is significantly improving intra-continental trade and resoundingly indicating that its future development is hinged on trade, not aid.
The combined African market (GDP) of the 55 member states who have signed up, is valued at USD3.4 trillion with a population of 1.3 billion people, majority of whom are women and youths. The Agreement, therefore, represents a bold proposition to shatter all trade barriers to, facilitate free movement of goods and create a unified market. In March, the AfCFTA and UNDP Regional Bureau for Africa (RBA) signed up to a strategic partnership to promote trade as a stimulus for Africa’s socio-economic recovery from the COVID-19 crisis, and as a driver of sustainable development.
However, the picture is not all elegant. Africa is home to eight of the world’s fifteen fastest growing economies and will, by 2050, have one in every four global consumers, yet there are concerns over how lack of inclusive growth could stunt the realization of this development projection. Agropastoralism and Informal Cross-Border Trade (ICBT), which are expected to be major contributors to the expected growth, through the provision of jobs, food security and, prosperity, are under threat due to spiraling insecurity, conflict and violent extremism. The borderlands are often the frontiers and critical transit points in this combat, a situation that makes them particularly vulnerable. In addition, COVID-19’s socio-economic impact, has had a disproportionate impact on borderlands’ communities, leading to the closure of businesses and the devastation of social protection systems. In the absence of robust state support, the livelihood of the poorest and most vulnerable households in the borderlands, most of whom are dependent on ICBT for survival, is now at risk. This gloomy perspective has been the main narrative about the borderlands.
Despite the challenges, Africa’s borderlands are notable for their incredible resilience and adaptability, which have made them critical to food security in Africa, mainly through ICBT. If the 270-million strong inhabitants of the borderlands are supported, they can be prepositioned to take more than a slice of the pie of the projected US$3 trillion investments in climate resilience and low-carbon infrastructure in Africa by 2030, with the development of environmentally sustainable agropastoralism and trading practices. Achieving sustainable development of the borderland communities, however, requires support for innovation in ICBT. Informal cross border trade can transform the lives of the most vulnerable persons. This entails not only the injection of catalytic funding to support short-term recovery of ICB traders, but more critically, to identify, curate, experiment, upscale and prototype locally developed solutions to improving access to finance for traders. This is what UNDP Africa Borderlands Centre based in Nairobi, Kenya intends to achieve with the 2021 Innovation Challenge themed “Improving Livelihoods through Informal Cross Border Trade (ICBT)”.
The intervention will support up to six border communities in Africa, to co-create and develop innovative solutions to funding challenges experienced in the conduct of ICBT. Promising solutions will be identified through collective intelligence, learning sessions and local sensing then cultivated for implementation. Successful pilots will be incubated, prototyped and replicated across other border communities in Africa, in a manner that ensures that the over 270 million borderlands inhabitants, who are currently at risk of being left behind in the race towards the SDGs, are supported on their own terms, and based on their own generated solutions.
Logic of ‘Trade not Aid’
- A culture of dependency: Foreign aid to developing economies is invariably wasteful and can create a culture of dependency. Also, recipients of aid may feel lower self-esteem, which is damaging in the long-run. Milton Friedman argues that, whilst aid can increase capital in a developing economy, it is also likely “that they lead to a noticeable increase in the amount of capital devoted to economically wasteful projects.”
- Aid given for bad motives: Aid is often subject to vested interests and fails to make real improvements in living standards. For example, government aid is often tied to bilateral agreements – aid to India with an expectation of demand for buying British exports. WIth private aid foundations, there is a concern that it gives power to unelected individuals in deciding priorities of societies.
- Trade increases welfare: Increasing trade is the best way for developing economies to improve their real economic welfare, and enable a sustainable increase in economic welfare. Most economists are united on the benefits of free trade to improve economic welfare. For example, US and EU tariffs on food, lead to higher prices of food for consumers in developing economies. Removing these tariff barriers would enable cheaper prices of global foodstuffs. This would make a real difference to economic welfare in developing economies. Also, farmers in developing countries would have more chance to export to the developed world. Further reading on benefits of trade.
- Success of trade in S.E.Asia: Supporters of ‘trade not aid’ point to countries in south east Asia who have been able to dramatically increase economic welfare through increasing trade. China has lifted record numbers of people out of absolute poverty through two decades of economic growth – largely driven by growth in free trade. Aid to China has played a very small role.
- Democratic costs: Foreign aid can disrupt political democracy in developing economies. Milton Friedman writing in “Foreign Economic Aid: Means and Objectives” (1995), notes that “many proponents of foreign aid recognize that its long-run political effects are adverse to freedom and democracy.” Aid may be given to prop up a government – and avoid a democratic change. It is arbitrary which groups receive aid.
- Foreign aid can displace domestic government incentives to invest in public infrastructure. If aid finances public health care, governments in developing economies may feel they don’t need to set up efficient tax collection and spend money – as they can rely on foreign aid. This is damaging for the long-term. For example, the Gates Foundation has been criticised for its decisions to target single diseases (such as Polio eradication) – whilst this is a laudable aim, it has also led to the neglect of basic healthcare provisions, but encouraged a more fragmented private system. Global Justice has been critical of the Gates Foundation for using aid to promote a particular economic ideology.
- How to Implement ‘Trade not Aid’
- Supporters of ‘trade not aid’, would seek to remove any tariff barriers or obstacles to free trade and opening up markets to competition
- Supporters of free trade usually support free market reforms to reduce the role of government interference and allow market forces to encourage innovation, efficiency and increased economic output. Policies to support free trade may involve.
- Reducing power of trades unions
- Privatisation of inefficient state owned industries.
- Cracking down on corruption
- Lower corporation and income taxes to increase the incentive to invest in export industries.
- Criticisms of ‘Trade not Aid’
- Aid for trade. Joseph Stiglitz has argued that aid is necessary to deal with global inequality and enable the poorer developing economies to fully benefit from the potential of trade. For example, aid can help improve infrastructure and transport links. Stiglitz argues the case for aid for trade is that it “should be motivated by the imperative to create ‘effective market access’ by removing internal barriers to trade.”
- Infant industry argument. Developing countries may not be in a position to benefit from free trade. For example, their comparative advantage may lie in primary products which are subject to fluctuating commodity prices. The infant industry argument suggests that developing countries may benefit from temporary tariff barriers as the new industry develops.
- Not all countries are the same. Several south-east Asian economies have benefitted from growth of trade (though it was not without protectionist measures) but this doesn’t mean the same model can be transferred to land-locked economies in Sub-Saharan Africa
- Aid can help overcome capital shortages and crippling debt payments. The Harrod Domar model of growth suggests that increasing capital is an effective way of increasing the rate of economic growth. For developing economies stuck in a cycle of low growth and low savings, aid can help break the negative cycle.
- Benefits of free trade are not always equitably distributed. Aid can enable assistance to areas of the economy that have missed out. For example, retraining for those who are geographically or occupationally immobile.
- INVEST IN DIGITISATION:
If Covid-19 has accelerated the adoption of digital solutions globally, in many key sectors Africa was ahead of the game. The uptake of fintech in the region has long outstripped more developed markets with established banks moving in to compete with challenger financial services providers. As businesses from sectors ranging from insurance to retail and banking to healthcare seek to implement their digital strategies, we’ll be discussing the challenges and opportunities of digitalising Africa’s economies.
Whilst there is no silver bullet for Africa’s recovery, we know that investment in digitisation will have to play a part. As the UN Secretary-General said recently about the post-COVID-19 world, “the future will be much more digital than the past.” There are some promising signs of the recognition for broad-based digitisation as one of the key learnings from this crisis. In March 2020, President Kenyatta of Kenya urged the private sector find ways to expand mobile money in order to reduce COVID-19 transmission through cash. As the African Union Commissioner Amani Abou-Zeid has also highlighted: “COVID-19 crisis has become the single biggest catalyst for digital transformation and has moved digitalisation from a niche market into mass adoption”.
But there is still a long way to go until everyone can feel the benefits of a digital society on the African continent. In Sub-Saharan Africa, more than four in five students still lack Internet access, and by some estimates, only 1% of total retail sales are made online, compared to 24% in China.
Four steps to achieve a digital society for all Africans
To avoid this, and to ensure Africa can fully leverage the learnings from COVID-19 to build a more resilient, inclusive and sustainable society through digitalisation, the international community must mobilise all of its efforts and resources. Backed by blended financing from the private sector, government and international development partners, a strong roadmap for African digitalisation should involve four interlinked actions:
- Bridging the digital divide: Broad-based digitisation, especially for those people at the bottom of the pyramid, is an effective measure to ignite and sustain economic growth, and it starts with ensuring access to digital infrastructure for all. A study by the International Telecommunications Union (ITU) found that expanding mobile broadband penetration by just 10% in Africa would equate to an increase of 2.5% in GDP per capita. Yet, traditional models for investing in digital infrastructure do not stack up in many rural or remote areas, due to a combination of high deployment costs, regulatory barriers and poor returns on capital. The international community must immediately unlock development financing to spend on new models of digital infrastructure investment, including financing partnerships between mobile operators and government to build shared infrastructure. Taking big bets on experimental technologies and innovations is also key.
- Invest in digital inclusion and skills: Nearly half a billion people in Africa have mobile broadband coverage, but do not access it. This clearly points to more complex barriers to digital inclusion than simply network coverage. UNCTAD in a 2019 study found that low digital skills and demand were the biggest barriers to digital entrepreneurship in developing countries. Investment must be channelled into broad-based skills development in order for all citizens to get the most out of connectivity and develop an African digital ecosystem of local digital content and services. This begins with governments integrating digital skills into national curricula for students, but should be extended out with businesses and community organisations providing life-long learning on digital topics. This will create informed demand for digital solutions that generate social and economic benefits in tune with specific local needs. The Africa Union’s Digital Transformation Strategy provides an excellent proposal through their Massive Online Digital Skills for All programme.
- Digitise public services, at scale: Whilst many governments across Africa have driven innovation in digital public services, there are few examples that deliver at scale. The COVID-19 crisis has accelerated initiatives around e-health and e-education. In the past two months, the use of our e-learning platforms has surged across Africa, often many hundreds percent, backed by governments working with telecom companies to zero-rate online education resources. Public-private partnerships should now be established to scale these efforts, with the support of international development finance. Providing the entire public with high-quality digital health and education services would lock in the digital society for good.
- Close the digital gap for small and medium enterprises: Those small and medium enterprises that have been able to ‘digitally diversify’ have proven themselves to be more resilient during the COVID-19 crisis. Those that did not have to play catch-up in the midst of an economic crisis. To support these businesses, Africa must leverage existing and create new technology offerings tailored towards micro-, small and medium sized enterprises in Africa, rolled out with the support of government. A good example is mobile money, where many African countries already have made significant headway. Mobile money fulfils the twin objective of supporting (financial) inclusion for the unbanked, while underpinning the growth of a new ecosystem of e-commerce, payments and financial solution for entrepreneurs. MIT research also showed that access to the M-Pesa mobile money platform lifted 2% of households out of poverty in Kenya. Finally, for all of these actions, Africa must ensure that acceleration of digital does not cement or exacerbate existing inequalities. There is already a 34% gender gap in digital access in sub-Saharan Africa. A growing body of evidence highlights that women’s livelihoods will be disproportionately impacted by the crisis, including the risk that many girls are pulled out of education for good during or after lockdowns. If we do not proactively address these inequalities, digital growth across Africa will remain skewed along gender lines.
- INVEST IN HUMAN CAPITAL:
The African Development Bank’s Human Capital Strategy aims to harness the potential of 1 billion Africans through skills development and investments in new technologies to promote quality jobs and workforce competitiveness. With a population bigger than any other continent’s, Africa has a huge asset and a strong competitive advantage.
Equipped with education, skills and jobs, its youth stand to be the most important driver of economic growth. Inclusive economic growth ensures Africans can reach their full potential and are on a path to prosperity. Harnessing individual potentials of Africa’s human capital is the most sustainable key to economic transformation and social progress.
With more than 27,000 cases, effects of the coronavirus have plunged sub-Saharan Africa into its first recession in 25 years, according to the World Bank. More than 1,200 deaths have so far been reported in 52 of Africa’s 54 countries, according to data compiled by the Africa Centers for Disease Prevention and Control (Africa CDC) on Friday.
All indications suggest that the COVID-19 will have a heavy human toll and cause an acute economic crisis in Africa, the World Bank said in a report. African countries need resources to combat this pandemic, and to safeguard lives and livelihoods. According to Munang, a skilled person capable of turning challenges into enterprise opportunities is four times the value of produced capital and 15 times the value of natural capital.
How in Utilize Human capital
- Investment in Youth: Munang said that unlike the West, Africa has the advantage of youth bulge. Therefore, there is a need to invest in human capital and produce a skilled population. The median age in Africa is 19 — and there are an estimated 80 million young people in vulnerable employment and a further 110 million who do not contribute to the economy, according to McKinsey & Company, an American management consulting firm. School closures will have a severe impact on young Africans, with long-term consequences, it said in a report — titled Tackling COVID-19 in Africa. According to Munang, African countries must urgently invest in skills retooling of these youth. ‘These youth need to be supported to refine, improve and adapt their skills – regardless of disciplinary backgrounds – for application in establishing enterprises that provide productivity solutions for the informal sector – such as the solar dryers,’ he said. Stimulus packages should go to create incentives in the form of tax breaks, reliefs, holidays and rebates to enterprising youth to encourage them and keep them afloat during these turbulent times, according to Munang.
- Cheap solar dryers: Although African governments have introduced numerous measures to stem the spread of the virus, including closing schools, imposing travel restrictions, and banning large gatherings, closing markets, there is still no letup in reporting of fresh cases. Most young Africans and entrepreneurs have been effected by the measure taken as they mostly depend on daily earnings. ‘Here, climate action solutions of solar dryers – made from locally available material not only provide income opportunities for youthful entrepreneurs who develop these dryers, but have proven formidable in preserving food and increasing shelf life,’ Munang said. He said Africa must prioritize the informal sector players who trade in perishables. ‘These dryers made from locally available material can be up to 200% cheaper.’ In Sub-Saharan Africa, the informal sector contributes 66% of total employment, which is classified as a set of economic activities, enterprises, and jobs, that are unregulated or not protected by the state. ‘Decentralized to food traders, they have proven effective to dehydrate various food items, increase shelf life and ensure food traders earn up to 30 times more trading in dried foods during the off season when demand peaks,’ Munang said. ‘To make these solutions affordable, part of the stimulus packages being announced can be purposed to target these informal sector traders,’ he said.
- Effects likely to be severe in urban areas: ‘As engines and drivers of economic growth, cities face considerable risks in light of COVID-19 with implications for the continent’s resilience to the pandemic,’ Thokozile Ruzvidzo, the director of the Gender, Poverty and Social Policy Division of the United Nations Economic Commission for Africa, said in a report. ‘The effects are likely to be severe in urban areas. The urban economy [manufacturing and services] currently account for 64% of GDP in Africa,’ said Ruzvidzo. Firms and businesses in African cities are highly vulnerable to COVID-19 related effects, especially small- and medium-sized enterprises which account for 80% of employment in Africa. ‘Additionally, urban consumption and expenditure [on food, manufactured goods, utilities, transport, energy, and services] are likely to experience a sharp fall in light of COVID-related lockdowns and reduced restrictions,’ Ruzvidzo said.
- DIVERSIFY THE ECONOMY:
Africa is endowed with abundant natural resources, including minerals, and revenues from their export constitute a major source of income for many countries. Algeria, Angola, Libya and Nigeria together produce a substantial portion of the world’s crude oil; South Africa and several other African countries are a major source of the world’s gold output.
Botswana, the Democratic Republic of the Congo (DRC) and Sierra Leone are major sources of diamonds. Other strategic minerals such as chrome, coltan, bauxite and manganese are found in several African countries. In addition, the continent produces a good proportion of the world’s tropical hardwood, coffee, cocoa and rubber. Relying on one economic activity or on a narrow range of exports and imports is detrimental to a national economy. The United Nations has strongly advised against African countries’ over-reliance on extractive commodities and for them to diversify their economic base. The World Bank forecasts that due to the COVID-19 pandemic, sub-Saharan African economies could experience recession with GDP growth expected to fall from 2.4 per cent in 2019 to between -2.1 per cent AND -5.1 per cent in 2020.
In a paper titled African Competitiveness: What do Natural Resources have to do with it? Shanta Devarajan, a former World Bank economist, James Cust and Pierre Mandon, also economists, maintained that natural resources do not necessarily cause the traditional Dutch-disease (the paradox of a natural resource harming a country’s broader economy); rather, they posit that natural resources lead to a boom in government spending that in turn significantly negatively affects competitiveness.
Africa has made socioeconomic progress in the last two decades, but economic diversification would have laid a more solid foundation for accelerated development. Economies that are not diversified experienced a decline in growth, accompanied by weak institutions, as well as stunted efforts at structural and economic transformation. Economies weakened by a lack of diversification are susceptible to global crises such as a pandemic. Poor healthcare systems and food insecurity are major concerns in under-developed regions. The International Institute For Environment and Development (IIED), a policy and research organisation focusing on sustainable development, emphasises that, “African nations are among those caught off guard [by the pandemic], constrained by chronically weak health infrastructure and reliance on global value chains.” The IIED further warns that currency depreciation driven by increasing current account deficits will create complications for countries that rely heavily on imports for food and oil.
Therefore, countries, especially those most at risk, must implement evidence-based policies and strategies that promote economic diversity. One such strategy is financial inclusion driven by the digital revolution to foster market integration and production activities at a much lower transaction cost. Digital platforms can also boost agricultural productivity through prompt payments for produce, information sharing and agro-industrial activities. Research and innovation must play a pivotal role in increasing economic resilience. Another strategy is to remove restrictive barriers to especially intra-African trade as well as trade with other regions. Barriers to trade include cumbersome import and export policies, trade taxes and complicated customs processes. Fortunately, implementation of the African Continental Free Trade Area (AfCFTA) is expected to address these obstacles.
- AGRICULTURE, AGRICULTURE, AGRICULTURE.
A good strategy that will lead to increased resilience and transformation is to improve agricultural productivity-led growth and the development of the agro-food system. African economic strategy and policy discourse have long underestimated the role that agriculture can play in a resilient and sustained transformation. Yet recent evidence shows that, in 2020, the agricultural sector outperformed the broader economy exactly because it was more resilient. This result continued a 20-year trend where the average annual growth rate of Africa’s agricultural production was faster than any other region in the world. Research has clearly demonstrated that, at lower income levels, agricultural sector growth and development is critical for poverty reduction, and less poor households are inherently more resilient.
If Africa can continue this trend, primarily by raising productivity on existing land and increasing climate resilience, the future for African agriculture is bright. As the world’s population grows, demand for food increases: In fact, the African continent will account for 80 percent of the world’s population growth between now and 2050. These new consumers are also expected to be richer, demanding higher-value food products (processed foods, fruits, and vegetables). At the same time, available farmland the world over is diminishing due to urbanization—offering an opportunity for Africa, with its vast quantity of arable land—to step in. Moreover, demand for food within Africa offers significant potential for intra-African trade. The importance of the agricultural sector in building a more resilient economy is clear.
Countries should move quickly to stay ahead of the risks, while building for a more resilient future. Achieving resilient, sustainable growth will not be easy, and will require the following: African food value chains becoming more internationally competitive; raising on-farm productivity; lowering the costs of production and distribution to cities and small towns; facilitating private investments in logistics and processing; reducing nontariff trade barriers between African countries; and, most importantly, successfully implementing appropriate adaptation policies for climate-vulnerable regions. The African continent will face many challenges in the post-COVID-19 world. Past strategies focused on transformation as a main outcome, but COVID-19 has highlighted the role resilience plays as an equally important economic outcome.
Therefore, African countries’ economic development goals need to strive to achieve these dual objectives. These goals can be further advanced by the two key strategies provided in this article. Importantly, success in both of these strategies would improve employment opportunities across Africa and strengthen poverty reduction at a time when progress on both has stagnated.
Sub-Saharan Africa, home to more than 1 billion people, half of whom will be under 25 years old by 2050, is a diverse continent offering human and natural resources that have the potential to yield inclusive growth and eradicate poverty in the region. With the world’s largest free trade area and a 1.2 billion-person market, the continent is creating an entirely new development path, harnessing the potential of its resources and people. The region is composed of low, lower-middle, upper-middle, and high-income countries, 22 of which are fragile or conflict-affected. Africa also has 13 small states, characterized by a small population, limited human capital, and a confined land area.
The economic impact of the COVID-19 shock in Sub-Saharan Africa (SSA) has been severe, however economic growth in Sub-Saharan Africa (SSA) is set to emerge from the 2020 recession and expand by 3.3 percent in 2021. This rebound, currently fueled by elevated commodity prices, a relaxation of stringent pandemic measures, and recovery in global trade, remains vulnerable in light of low rates of vaccination on the continent, protracted economic damage, and a slow pace of recovery. Growth for 2022 and 2023 will remain just below 4 percent, continuing to lag the recovery in advanced economies and emerging markets. East and Southern Africa, the hardest hit region by the third wave of the coronavirus, is expected to rebound from a 3.0 percent contraction of GDP in 2020 to growth of 3.3 percent in 2021 and 3.4 percent in 2022. Growth in South Africa is projected to rebound from -6.4 percent in 2020 to 4.6 percent in 2021, and following two consecutive years of recession, economic activity in Angola is projected to rebound from -5.4 percent in 2020 to 0.4 percent in 2021. Excluding Angola and South Africa, the subregion is expected to grow by 3.1 percent in 2021 and 4.3 percent in 2022.
Growth in West and Central Africa is expected at 3.2 percent in 2021, up from -0.8 percent in 2020 and estimated to grow further by 3.6 percent in 2022. The subregion is expected to pick up momentum from last year’s weak performance to 4.5 percent in 2021 and 5.3 percent in 2022. Nigeria is projected to grow from -1.8 percent in 2020 to 2.4 percent in 2021, thanks to better performance of both oil and non-oil sectors. Excluding Nigeria, The West African Economic and Monetary Union is projected to grow at 5.6 percent in 2021 and 6.1 percent in 2022, reflecting favorable terms of trade.
Faster vaccine deployment would accelerate the region’s growth to 5.1 percent in 2022 and 5.4 percent in 2023—as containment measures are lifted faster and spending increases. However, should vaccine delivery and coverage continue to lag, growth could slow to 2.4 percent in 2023.
African countries have seized the opportunity of the crisis to foster structural and macroeconomic reforms that could pave the way for increased inclusive growth over the long-term.
Several countries have embarked on difficult but necessary structural reforms, such as the unification of exchange rates in Sudan, fuel subsidy reform in Nigeria, and the opening of the telecommunications sector to the private sector in Ethiopia. Reforms that deliver reliable electricity, including better functioning of public utilities, can power the manufacturing sector and the digital economy. Finally, reforms that address digital infrastructure gaps and make the digital economy more inclusive—ensuring affordability and building skills for all segments of society—are critical for improving connectivity, boosting digital technology adoption, and generating more and better jobs for men and women
More than a year into the pandemic, recovery in the region is hampered by low vaccination rates and limited resources to continue providing financial assistance to vulnerable households and firms.
As part of the global response since the start of the COVID-19 crisis, the World Bank Group has committed over $157 billion to address the impacts of the pandemic, which includes more than $39 billion for African countries to help them strengthen health systems and services, establish and expand social safety nets, and weather the economic impacts of the crisis. More operations are under preparation for FY22 for about $46 billion.
The World Bank’s response efforts are focused around four main areas: saving lives, protecting poor people, protecting and creating jobs, and building back better.
Saving Lives: The World Bank has taken fast action to help African countries strengthen their pandemic response and health care systems and is now stepping up its support on vaccine purchase and deployment. With the vaccine roll-out underway in many African countries, ensuring an adequate supply of affordable COVID-19 vaccines is a priority for the region. The World Bank has committed $2.92 billion for the procurement and deployment of COVID-19 vaccines in 41 countries in the region. This emergency vaccine financing complements ongoing COVID-19 emergency projects in 36 countries (amounting to $988 million) which focus on strengthening prevention, expanding testing and providing medical equipment such as portable ventilators, oxygen concentrators, personal protective equipment and masks. AVAT vaccine deliveries of Johnson&Johnson doses started the first week of August 2021, with 5 million doses delivered in the first month of implementation. Following the timelines provided by AVAT, new deliveries have been on track, with 13.54 million doses already delivered to countries in Africa and CARICOM as of November 5th. Of the 13.12 million doses delivered to Africa, 10.36 million doses are being financed (or will be retroactively financed) through WB projects in 26 countries.
Protecting poor people: To protect poor and vulnerable citizens and cushion the impact of the crisis on their livelihoods, the Bank is helping African countries scale up and adapt social safety net programs and ensure food security by supporting farmers to expand agricultural production as well as sustain food supply chains. Since the start of the pandemic, more than $4.1 billion new financing has been approved for social safety net programs across the continent, including in Sudan, Togo, Niger, and the Democratic Republic of Congo. This boost to safety net programs is helping address chronic poverty through cash transfers and supporting those who lost their livelihoods following the pandemic.
Protecting and creating jobs: Micro, Small and Medium-Sized Enterprises, which provide the majority of jobs, have been particularly hard hit across the region where informal firms dominate employment. Public works and urban programs in countries such as the Central African Republic and Kenya are being launched or scaled up to facilitate job creation in low income communities and to help increase access to livelihood support for extremely poor and vulnerable people like women and the youth. Meanwhile, the World Bank Group’s private sector arm, the International Finance Corporation (IFC), is working to increase financing for small businesses, develop digital infrastructure, help keep agriculture supply chains running, and enable local manufacturers to access working capital.
Building Back Better: While addressing the immediate impacts of the COVID-19 pandemic, the focus on recovery remains central to the Bank’s response and support to countries. More than 20 SSA countries have requested development policy operations or budget support from the Bank to assist them to manage the fiscal impacts of the pandemic. As of October 5, 2021, the World Bank has approved 35 Development Policy Operations in SSA for more than $5.9 billion provided by the International Development Association (IDA) and $1.3 billion provided by International Bank of Reconstruction and Development, in support for policy actions to help with the recovery process.
The World Bank Group continues to prioritize investments in human capital and digital economy. It supports initiatives in favor of climate change adaptation and mitigation and is deploying efforts to address the drivers of fragility, conflict, and violence. Finally, the World Bank is scaling up its work on regional integration, taking a holistic view of the continent to improve connectivity, leverage economies of scale, and advance collective action to address shared challenges.
Research and analysis: Knowledge is essential for governments to make better policies and institutions to make aid more effective. The World Bank’s most recent regional studies can be found here, and analytical work by country is published on each country’s website. These knowledge products, paired with strong analytical work by sector, can help promote substantive discussions and drive evidence-based policy making around key development issues.