The European Business Council for Africa

The International Monetary Fund (IMF) has published its latest version of the Finance & Development magazine with the focus of this issue being "Geo-economic Puzzle: Policymaking in a More Fragmented World". 

Regarding the continent of Africa, this issue contains articles of interest covering the topics of energy transition, food crises, changing geopolitical landscapes and the inequalities suffered by poorer regions in todays world, chief among them Africa. 

Après avoir enregistré ses premiers cas confirmés de COVID-19 le 25 mars 2020, le Mali a connu une rapide propagation de la pandémie. Pour faire face à cette situation, le pays a pris, en mars et mai 2020, des mesures restrictives qui ont eu des effets négatifs sur l’activité. Globalement, la pandémie a affecté le secteur privé en causant une accélération du chômage technique et des pertes massives d’emplois estimées à 49,20% en 2020, occasionnant des pertes de chiffre d’affaires évaluées à 24,21%. Or, le secteur privé est fortement dominé par les petites et moyennes entreprises (PME) qui représentent 90% des entreprises. Etant donné que les PME sont orientées vers l’extérieur, tenant compte de leurs secteurs d’activités affectés par les mesures de restrictions et considérant leur état de faible performance avant la pandémie, elles sont ainsi très exposées aux effets de la crise sanitaire mondiale.

This study uses unique firm-level data from EIBIS to identify EU firms' climate strategies and the firm characteristics associated with them.

Through a clustering analysis, the these strategies are divided into five distinct clusters, in line with the correspondent literature. We then investigate the role of various firms' characteristics in their adoption based on a multi-logit regression.

The findings show that almost half of the EU firms either adopt "wait-and-see" strategies or plan to invest in tackling climate change risks. More climate-friendly strategies appear to be positively associated with awareness of climate-related risks, especially with firms that see the transition to a low-carbon future as an opportunity. Similarly, those strategies are followed by large firms that are innovative, face fewer credit constraints and operate in an environment where there is a strong push for climate action from various stakeholders. These findings can guide policymakers on supporting firms' transformation to play their part, as an integral part of our society, in the road to a clean, affordable, and secure energy future.

The COVID-19 pandemic and its effects affected sectors in different ways, including on the firm-level productivity. Findings show that firms’ responses to the COVID-19 crisis varied within sectors: more productive firms coped with the crisis better in terms of closures and employment adjustments. They were also more likely to speed up some digitalisation processes.

These findings imply that the recent crisis could amplify the difference between highly productive and less productive firms. When it comes to the governments’ policy measures, we find strong usage at the firm level, but very little differentiation across productivity quantiles, suggesting room for a more targeted approach for the reminder of the pandemic.

This paper analyses the interests and incentives around two overlapping regional organisations in West Africa: ECOWAS (the Economic Community of West African States), which has fifteen members, and UEMOA (the West African Economic and Monetary Union), whose eight members are also ECOWAS members. We explore the interaction of the formal mandates and cooperation structures of the two organisations, looking at their history, legitimacy and member state interests, and focusing particularly on regional trade.

While overlapping UEMOA-ECOWAS memberships have a history and a logic, they create practical difficulties, particularly in the case of promoting regional trade. UEMOA’s greater apparent integration and longevity compared to ECOWAS partly explains why recorded trade flows seem more concentrated among UEMOA member states. At the same time, ECOWAS derives its legitimacy from its greater scope of membership, its peace and security role, and by being one of eight regional economic communities that is recognised by the African Union.

Despite the numerous, lingering negative effects of the pandemic — from global supply chain disruption and rising inflationary pressures to recurrent waves of COVID-19 infections and the emergence of threatening variants — the globalisation of growth resilience will emerge as one of the most important stories when economic historians reflect on this time. In a major and synchronised reversal, growth bounced back in 2021 in one of the strongest post-recession recoveries in decades.

Although the recovery rate was uneven across regions and countries (World Bank, 2021a; IMF, 2021a), output expansion was exceptionally strong in many advanced as well as emerging market and developing economies, the base effect notwithstanding. Botswana’s GDP, which expanded by 12.5%, making it the fastest-growing economy in Africa and one of the fastest growing in the world, exemplifies these circumstances among developing economies.

Returning Africa to its development path.

Africa faces an extraordinary set of challenges. Following the devastating domino effects of the Covid-19 pandemic, economies must be rebuilt, and public services and long-term investment programmes restored.

At the same time, African countries must also manage the accelerating impacts of climate change, prepare for future health emergencies, and deal with the prospects of a global food crisis triggered by the war in Ukraine. They face these challenges in the context of rising debt and sharply constrained public resources. Rebuilding and development require investment. If countries are unable to mobilise the resources they need, their prospects of achieving the Sustainable Development Goals will recede.

The African Development Bank (AfDB) has published its African Economic Outlook for 2022. 

Amid the crisis of the COVID-19 pandemic and the recovery from the economic impact that it has had, the Russian invasion of the Ukraine is threatening economic progress that has already been made as well changing the dynamics of the continent's future prospects. 

In 2021, Africa accounted for 70% of the total value of mobile money transactions globally. In recent years, the continent has experienced a rapid proliferation of digital instant payment solutions. However, many of these are not interoperable with each other, and even less so across borders. As Africa works towards building the African Continental Free Trade Area (AfCFTA), interoperability of cross-border instant payment solutions will be vital to increasing trade. Furthermore, ensuring cross-border interoperability of low value instant payment systems, notably mobile money, will be an essential step in making sure that the AfCFTA is inclusive, and that its benefits can extend to small-scale traders, many of whom are women.

Fragility and conflicts prevent countries from achieving sustainable development goals. They cause a loss of lives and livelihoods, displacement of people, poverty and hunger, poor health and education services, and gender and income inequalities. Although official development assistance is the most critical source of external assistance used to support the economic recovery of fragile and conflict-affected countries (FCACs), development finance institutions (DFIs) are also increasingly committed to investing in fragile contexts. However, DFI operations are still more concentrated in politically stable middle-income countries, with minimal investments directed towards FCACs.