Akinwumi Adesina, President AfDB
Owing to the continuous spread of the coronavirus across the globe, the Africa Development Bank, AfDB, Akinwumi Adesina says “we must avoid fiscal distancing at this time. A stitch in time will save nine”.
According to Adesina, “Social distancing is imperative now. Fiscal distancing is not”.
He noted that these are very difficult days, as the world faces one of its worst challenges ever: the novel coronavirus pandemic. And it seems almost no nation is spared. “As infection rates rise, so does panic across financial markets, as economies drastically slow down and supply chains are severely disrupted”.
“Extraordinary times call for extraordinary measures. As such, it can no longer be business as usual”.
“Each day, the situation evolves and requires constant reviews of precautionary measures and strategies. In the midst of all this, we must all worry about the ability of every nation to respond to this crisis. And we must ensure that developing nations are prepared to navigate these uncharted waters fully”.
“In the face of this pandemic, we must put lives above resources and health above debt. Why? Because developing economies are the most vulnerable at this time. Our remedies must go beyond simply lending more. We must go the extra mile and provide countries with much-needed and urgent financial relief — and that includes developing countries under sanctions”.
“According to the independent, global think tank ODI in its report on the impact of economic sanctions, for decades, sanctions have decimated investments in public health care systems in quite a number of countries”.
“Today, the already stretched systems as noted in the 2019 Global Health Security Index will find it difficult to face up to a clear and present danger that now threatens our collective existence. Only those that are alive can pay back debts”.
“Sanctions work against economies but not against the virus. If countries that are under sanctions are unable to respond and provide critical care for their citizens or protect them, then the virus will soon “sanction” the world.
In my Yoruba language, there is a saying. “Be careful when you throw stones in the open market. It may hit a member of your family.”
That’s why I also strongly support the call by the UN Secretary-General that debts of low-income countries be suspended in these fast-moving and uncertain times.
But I call for even bolder actions, and there are several reasons for doing so.
First, the economies of developing countries, despite years of great progress, remain extremely fragile and ill equipped to deal with this pandemic. They are more likely to be buried with the heavy fiscal pressure they now face with the coronavirus.
Second, many of the countries in Africa depend on commodities for export earnings. The collapse of oil prices has thrown African economies into distress. According the AFDB’s 2020 Africa Economic Outlook, they simply are not able to meet budgets as planned under pre-coronavirus oil price benchmarks.
Third, while rich countries have resources to spare, evidenced by trillions of dollars in fiscal stimulus, developing countries are hampered with bare-bones resources.
The fact is, if we do not collectively defeat the coronavirus in Africa, we will not defeat it anywhere else in the world. This is an existential challenge that requires all hands to be on deck. Today, more than ever, we must be our brothers and sisters’ keepers.
As developed countries put in place programs to compensate workers for lost wages for staying at home for social distancing, another problem has emerged fiscal distancing.
Think for a moment what this means for Africa.
