The European Business Council for Africa

Situation Overview

Increasing vulnerabilities and worsening humanitarian needs due to lockdowns have devastated livelihoods. UNOCHA’s humanitarian response plans are showing a higher number of people in need (10% higher than this time last year, which equates to 48.9 million in East Africa, 45 million in Southern Africa, and 44.7 million in West Africa).

Prolonged school closures have negatively affected children’s learning and led to higher teenage pregnancy rates. According to a recent World Vision study, as many as 1 million girls may be blocked from returning to school across sub-Saharan Africa.

Reduced funding commitments and COVID-19 lockdowns have increased vulnerabilities amongst forced migration populations (i.e. internally displaced persons and refugees) and migrant workers across east, west, and southern regions. In East Africa, for example, the World Food Programme has reduced food rations for refugees.

Reports indicate that gender-based violence and mental health challenges are also increasing due to lockdowns and lost livelihoods.

Will Africa adapt its counter-terrorism operations to changing realities?
Election observation put to a test as African borders slowly re-open Presidential power play undermines democracy in Africa
Ghana’s Western Togoland crisis and Africa’s unanswered secession questions EU–Africa negotiations: can Africa speak with one voice?

Will Africa adapt its counter-terrorism operations to changing realities? […]

The Digital Banking Report is an initiative by African Banker magazine and Backbase that aims to provide a clear road-map for digital transformation across the banking sector in Africa. The speed at which banks are embracing the po- tential offered by technological changevaries considerably but there appears to be only one direction of travel. It is inconceivable to imagine a bank in a decade’s time where the lion’s share of transactions are not carried out on a digital platform, with time and money savings for both the bank and customer involved. 

The number of Africans with bank accounts increased from 170m in 2012 to nearly 300m in 2017 and is forecast to reach 450m by 2022, according to consultants McKinsey. However, most Africans do not have access to tradi- tional banks and the number of bank branches has not changed on the conti- nent over the past five years, so access to physical branches is not improving. […]

As the “Decade of Action” begins, the world needs an effective multilateral development finance system to deliver on the promises of the 2030 Agenda and support the recovery of developing countries from the coronavirus (COVID-19) crisis. Even before the crisis, the system, torn between high expectations and growing criticism of its perceived lack of accountability and effectiveness, was showing signs of stress. This report looks at recent trends in the multilateral development system in order to provide the clearest possible picture to those deciding on its future. It presents the evolution of multilateral inflows and outflows, and analyses the strategic implications of the contributions by members of the Development Assistance Committee (DAC). The report looks at the activities that multilateral organisations finance, and explores their respective strengths. This year’s edition is supplemented by a series of policy briefs, as well as online statistics on DAC members’ multilateral contributions, available in the Development Co-operation Profiles. 

The EU is in the process of adapting its budgetary instruments to respond to the consequences of the coronavirus crisis, in particular in raising the established ceilings for some financial instruments. The proposed adjustments include, among other things, measures aimed at helping the most fragile third countries recover from the consequences of the pandemic. In particular, on 28 May 2020, the European Commission put forward a proposal concerning the European Fund for Sustainable Development (EFSD) in order to expand its coverage and raise the funds dedicated to leverage private investment for sustainable development and the guarantees to de-risk such investment. On 21 July 2020, the European Council rejected the draft amending budget that would have provided increased EFSD funding for the current year. 

On 15 and 16 October 2020, the European Council adopted conclusions on COVID-19, EU-UK relations, climate change and external relations. 

The European Union (EU) has committed to supporting the global transition to more sustainable food systems. As
the world’s largest food importer, the EU can use its trade policies and agreements to stimulate and incentivise more sustainable practices by its trade partners. In this brief, we provide specific recommendations on how the EU can do so.

Building on lessons from existing initiatives, the EU should adopt sector-specific regulations and sustainability standards to promote imports of sustainable food, and restrict the import of illegally or unsustainably manufactured products. Further, real change can only be achieved if the EU makes sustainable food systems an explicit objective of its free trade agreements, negotiates relevant sustainability provisions in these agreements and monitors efficiently the impact of these provisions on food systems. At the multilateral level, the World Trade Organization and the upcoming 2021 Food Systems Summit can be good platforms for the EU to build alliances with like-minded countries to push for global trade rules that promote sustainable food systems. […]

The theme of the dialogue was ‘Fiscal responses to Covid-19 Pandemic and Economic Recovery Measures’. The thrust of the dialogue was that, the Covid-19 containment measures put in place by governments around the world unleashed an un-expected global lock down and an economic recession resulting from a drop in economic activity. In Uganda, the economy is expected to underperform by about 3 percentage points from the 6% growth rate that was envisaged for the FY 2019/20. While Uganda has so far done exceptionally well in containing the disease, registering many recoveries and no deaths, it has come at a huge cost. In a bid to slow down infections, economic activity was brought to a grinding halt. This has significantly reduced household incomes and government revenue. Many businesses are in distress from financial obligations as well as disruptions of supply and distribution chains. The debate at the dialogue largely focused on what should be prioritized during the Covid-19 pandemic, what the change may mean for the country’s development in the short-term and the interventions for economic recovery. […]

Current models used to analyse African development don’t align with the continent’s context and dynamics, and need to be overhauled. Approaches should explicitly consider the defining characteristic of African economics, namely its wide-ranging informality that lies beyond existing legal frameworks. In doing so, five trends must be considered, namely climate change, rapid urbanisation, epidemic/pandemic vulnerabilities, immense infrastructure deficits, and the lawlessness that also gives rise to violent extremism. This report first discusses current development trends in Africa and highlights how existing development theories and methodologies have not appropriately understood or addressed the tenuous nature of development on the continent. The following sections briefly analyse each of the five dynamic trends, before exploring how they interact and affect each other. After assessing the trends’ combined influence on the three continental-wide structural factors, the report concludes by suggesting a way forward for development decision-makers, policymakers and practitioners. […]

Recovery should reduce economic divergence and boost the EU’s long-term social and environmental targets, the Economic and Monetary Affairs Committee said on Thursday.

In their vote on Thursday on economic policies needed in the euro area to tackle the crisis created by the pandemic, MEPs from the Economic and Monetary Affairs Committee stressed that EU countries’ economies are strongly interconnected. An incomplete recovery in one country would therefore spill over to all the other countries and dampen economic growth everywhere.

Targeted spending decisions

MEPs also said that the governments' spending decisions following the COVID-19 crisis should focus on putting more funds into reversing climate change and boosting digitalisation. These measures should also foster social, economic and environmental resilience and include investments, especially in SMEs. At the same time, MEPs suggest that the Commission should explore how to better finance the Just Transition Fund, designed to alleviate the socio-economic effects of the transition to a climate-neutral economy. […]