Although some countries around the world seem to succeed in flattening pandemic curve, Africa still has a long way. Consequently, African policymakers have to consider lessons from other nations. Firstly, they have to implement a pandemic policy decree to inoculate the African economy during the current situation and the future.
Sure, such a manifesto will assemble all the available policy arms. For instance, this requires more effort in health, financial, fiscal monetary, labor markets, industries, environment, and regional integration policies. Public health is where to start in the first place because of the global health security index. The rank shows that only 21 countries out of 51 are stable in terms of clinical perspective.
African Economy and the Vulnerable groups
The truth is young people and women are the most vulnerable groups during this pandemic crisis. Therefore, policymakers should offer the necessary support. For instance, they can extend financial payments in the informal sector, including young workers and insecure women. Sure, the informal sector accounts for more than 80% of economic activities in Africa.
Likewise, the governments should consider small scale and medium-sized enterprises by boosting their float. After all, these enterprises are more exposed to demand and supply shock caused by the lockdowns. The governments need to come up with specific policies targeting the informal and formal enterprises.
Since these extra expenses might overrun revenues, the governments must build a financial recovery plan. Sure, this should be the one to bring a balance between the economic alliance and fiscal stimulus.
Increase public spending
Indeed, this is not the time for the governments to hold back expenditures. According to Akinwumi Adesina, the pandemic gives no chance for fiscal distancing. The policies need to respond from both revenue and expenditure sides. Besides, public spending can cushion the outbreak impact while minimizing economic dislocation to save lives.
In terms of expense, governments should apply urgent and fair efforts on the health sector. It does not matter of how much room is in the budget. Indeed, this helps peacemakers build resilient health systems that can withstand the pandemic pressure. They should also boost clinical management and assessment of essential services. Moreover, they should upgrade the laboratory testing means to broaden health access care.
Debt management
Although seeking help from other nations is okay, you should limit your debt. Sure, without an ultimate plan, you may end up unable to pay back. Likewise, African governments should build an excellent strategy to avoid bad debts. If they don’t control the situation, the pandemic will add a liability burden to the Africa economy. Consequently, this will heighten the chances of widespread and un-payable debts.
Right, Africa faces increased expenditure, collapsing tax, and foreign exchange. There is also less capital because of extreme risk aversion by investors. Besides, this results in volatile markets, widening independent bond yields. In this way, African debts become riskier to investors. The governments end up unable to refinance the growing deficits.
Conclusion
Though financial institutions such as the World Bank, the African Development Bank, and IMF promise to help, it’s time to react for all Africans. For instance, those who are capable can help the needy or the most affected. Let’s act quickly and together to save African lives and livelihood.
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