The President of African Development Bank (AfDB) Group, Dr Akinwunmi Adesina, has said African countries put together, under the worst scenario, may lose up to US$88 billion over the COVID-19 pandemic which is ravaging the world.
He also said the continent debt profile had jumped from $1.8 trillion (representing 61 per cent of the continent’s Gross Domestic Product (GDP)) in 2019 up to $2.1 trillion, which represents about 65 per cent of the continent’s GDP as at this year in the worst scenario of coronavirus (COVID-19).
Adesina made this disclosure, on Thursday, during a digital press conference with newsmen from African countries where he announced a sum of $10 billion intervention fund from AfDB to African countries including Nigeria to fight coronavirus pandemic.
He said though, not only African countries would go into recession if they are not under it already at the moment, but the world at large including Europe and the US, African countries would need a lot of help to be able to recover from the impacts of COVID-19 crisis.
According to him, the GDP of the African continent is failing daily and that AfDB had projected a fall of between 0. 7 per cent and 2.8 per cent this year and this projection is a huge loss to any economy.
He said African countries would need serious help because of its economic disadvantaged status in terms of poor infrastructural facilities, continued fall in oil revenue which is the major foreign exchange earner for many of them, running of the import-dependent economy, low agricultural productivity, low tourism patronage and so forth.
“So, there is no enough resources in Africa to help the economy bouncing back and that is why the continent will need up to $100 billion post-COVID-19 support,” he said.
Adesina, who is an agric economy expert, said to achieve such huge support would require collective efforts globally, including to re-profile the debts payment of African countries.
“But AfDB can’t do that all alone and I don’t also ask for any institution to do that alone. It has to be a collective effort of all of us working together to provide fiscal space for African debt repayment,” he said,
Another way out, he noted, would require bilateral and multilateral cooperation of countries and institutions that would also involve commercial lenders in the private sector and the rating agencies.
He said COVID-19 was not a creation of any country, nor it was because of poor economic policy nor fiscal mismanagement of any country, but a global pandemic that is independent of itself and therefore would not be augur well to penalize any country for what she did not cause.
Speaking about the $10 billion response facility from AfDB to African countries to fight COVID-19 at the moment, Adesina, who is the eighth elected president of the bank, said AfDB believes that even if people are asked to maintain social distancing as part of the measures to curtail the spread of the disease, it is required that various countries are supported financially to enable them to fight the contagious disease effectively.
According to him, every part of the world needs supports to be able to adequately protect their population and economy at this time and also for economic recovery after the coronavirus pandemic and therefore, the announcement of $10 billion by AfDB is a demonstration of the seriousness with which AfDB takes the issue of coronavirus pandemic.
He said it was quite sad that a huge number of people have lost their lives to the virus in Africa and also globally, describing the development as one death, too many.
“And so we must move rapidly and aggressively to give Africa maximum support to quickly contain this epidemic as we cannot allow coronavirus to overrun us,” he said.
He explained that the bank raised the $10 billion facility by going to the international capital market to raise a Social Impact Bond of $3 billion and that the $3 billion is called Fight Corona Virus Bond.
While noting that the bond is the highest and the largest social impact bond ever launched globally, AfDB boss said it had been listed on the London Stock Exchange and oversubscribed.
He, however, explained that the entire $10 billion would be shared into three for AfDB countries- which are countries that have access to the commercial window of the bank, AfDB Fund countries, which are low-income countries and the private sector in the ratios of $5.5 billion, $3.1 and $1.4 billion, respectively.
He noted that the private sector is captured under the support facility to enable operators to meet emergency and strengthen their financial base, especially as the Small and Medium Scale Enterprises (SME) form about 75 to 85 per cent of businesses in Africa.
“So, we must have to protect SME sector for its enormous contributions to the economy of the continent,” he stressed.
While he believes that government of every beneficiary country would certainly utilise the intervention fund judiciously and would not divert them for something else, he, however, lamented the poor healthcare structure and facilities in Africa, saying it is high time the continent started parading quality healthcare system from primary to tertiary levels as well as the pharmaceutical industry.
Adesina, a former Nigeria’s Minister of Agriculture and Rural Development, said AfDB had been looking in that direction and would do something in no distant time to help the continent out in its own little way.
He said it was absurd that the entire African countries have only 375 pharmaceutical companies for the population of about 1.3 billion people while China and India with a population of 1.4 billion people each has over 7,000 and about 10,500 pharmaceutical companies, respectively.
He said it shows by this analysis that Africa as a whole does not have the required capacity to produce the needed pharmaceutical products for its people but depends on the importation of the same and that this must be stopped. (Nigerian Tribune)
