Africa’s post-Covid recovery in the light of the continent’s place in the global economy

Published on : 25/02/2021 – 00:07

The 20th International Economic Forum on Africa, which was held earlier this week (Monday, February 22, 2021) in virtual mode, had for theme, “Investing for a sustainable recovery” on the continent. Main organizer of this annual debate for 20 years, the OECD has other partners: the African Union, Senegal in particular, to identify the agitators of ideas. And in this period of pandemic, the 2021 Forum will be remembered as a unique edition.

Like developed countries, African countries have each organized a response against the economic consequences of the Covid-19 pandemic at their own level. But the longer the health crisis lasts, the more the question of recovery arises, 41 of the 54 African countries having experienced recession in 2020, some for the first time in 25 years. In order to increase the financial resources that will allow Africa to prepare for the post-Covid period, the Senegalese president is asking for the extension of the debt moratorium, which ends on June 30, to extend it to the whole of year 2021. Macky Sall also calls for a reform of economic and financial governance at the international level, in particular on three aspects which deprive African countries of significant financial resources.

“First, there is the review of the international tax system. With the anti-evasion, tax base and profit shifting project piloted by the OECD under the aegis of the G20; second, the fight against illicit financial flows, which cost Africa up to $ 100 billion a year; third, support for the revision of mining codes and petroleum codes, for a fair remuneration of these resources. ”

With regard to the fight against tax evasion, the Senegalese president pleads for the tax to be paid where wealth is created. This is the same argument advanced by developed countries so that digital giants are taxed wherever they derive their profits. But Africa must first rely on itself, some speakers of the 20e International Economic Forum underlined this sufficiently, with hopes that the African Continental Free Trade Area (entered into force on 1is January 2021) to be a success.

Among the conditions for this hoped-for success is the continent’s ability to equip itself with basic infrastructure to facilitate economic activities in terms of trade. Ibrahim Hassan Mayaki, Executive Secretary of NEPAD (New Partnership for Africa’s Development): “Without regional infrastructure projects, there will be no implementation of the Continental Free Trade Area. And being regional, our infrastructure projects must absolutely adopt an integrated development corridors approach, because we often talk about different priorities: education is the priority, health is the priority, nutrition, etc. There are no priorities! The challenges are multisectoral, the responses must be multisectoral. So, in the Lagos-Abidjan corridor, we will be able to have road, we will be able to have rail, we will be able to have optical fiber, we will be able to have polytechnic institutes, which will train people in rail maintenance, etc. “

For their management, these integrated corridors require efficient institutional coordination between the services of the different countries concerned. The idea that the Continental Free Trade Area is a growth accelerator is based on the fact that Africa’s GDP has already increased by 4.6% from 2000 to 2018; a performance that was largely based on domestic demand.

.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.