The European Business Council for Africa

GDP growth projections in Africa were 3.9 percent and 4.1 percent for 2020 and 2021 respectively. This all changed following the most devastating public health crisis in time immemorial that led to the region’s first economic recession in over two decades in 2020. In addition to the economic damages, the COVID-19 pandemic also claimed millions of lives across the world, wrecked livelihoods, and fundamentally changed our ways of being and living. With vaccines now available and being dutifully rolled out across Africa, there is a renewed sense of optimism. If African governments can keep pace with the right set of institutional and governance reforms, we can expect their respective economies to bounce back and leave the worst of the pandemic behind us. The African Development Bank stepped up to support its regional member countries during the pandemic and, in moving forward, the Bank is ready to continue in the journey towards full economic recovery and resilience. The Strategy for Economic Governance in Africa (SEGA) is the Bank’s blueprint for this journey. The document is prepared in full cognizance of the lessons learnt from the pandemic. We now appreciate that public spending must be prioritized towards basic service delivery ensuring that public resources deliver education, health and creating the basis for structural transformation. Significant public investment must be made in the health sector to get hospitals fully equipped and surveillance systems ready to contain any future pandemic. Also, investment in education must remain at primary and secondary school levels, preparing African children for the same future as their peers elsewhere, but the continent must also catch up in what it allocates towards early-stage research and development. We have also learnt that as expenses are allocated towards these sectors the right institutional frameworks must be put in place to stop expenditure leakages.

SEGA presents an opportunity to work closely with African countries to be more deliberate and strategic in the management and use of public finances. Public revenue streams must be sufficiently diversified to reduce fiscal vulnerabilities associated with commodity price swings or seasonality of the tourism sector. The tax base in African countries must be widened and loopholes that enable tax evasion must be identified and closed. Many African countries have demonstrated macroeconomic maturity with their entry into international debt markets, but they have to be more strategic with how they procure short and long-term debts, ensuring that it contributes to productive growth without compromising fiscal sustainability and causing a debt crisis. The pandemic also showed the critical role non-state actors can play in public governance. Private companies and individuals pooled resources to assist governments in their procurement of sanitation materials, personal protective equipment, vaccines etc. etc. Civic groups were also active in demanding accountability in the use of such resources as well as financial resources allocated by governments at state and national levels for the purpose of keeping the pandemic under control. Transparency, accountability, rule of law and all the other tenets of good governance are critical for economic recovery and SEGA operationalizes the Bank’s work towards achieving them over the next five years. Along with other institutional partners who work on the same theme in the African continent, we are excited to help build African economies better. The Strategy for Economic Governance in Africa encapsulates our intentionality about this. Please find full report here.