The most important lesson from the Covid-19 pandemic for Africa is the need to build a defense mechanism against external shocks, especially in healthcare and financial security.
“Investing in health is investing in national security,” Adesi African Development Bank Group President Dr Akinwumi Adesina told African leaders at the opening of the 35th African Union Assembly on 5 February 2022. “Africa cannot afford to outsource the healthcare security of its 1,4-billion citizens to the benevolence of others.”
The bank chief says the continent needs $484-billion over the next three years to address the socio-economic impacts of the Covid-19 pandemic and support economic recovery.
Adesina outlined three strategic priorities for an African healthcare defense system: building quality healthcare infrastructure; developing the continent’s pharmaceutical industry; and increasing the capacity of vaccine manufacturing.
TheAfrican Development Bank plans to invest $3-billion to support Africa’s pharmaceutical and vaccine manufacturing capacity.
Adesina adds: “Africa’s public debt, currently estimated at $546-billion, represents one-quarter of the continent’s GDP and is higher than the combined total annual government revenues of $501-billion.”
He says the African Development Fund, the bank group’s concessional lending arm, had supported low-income countries with $8.5-billion over the last five years.
Calling on African Union leaders to strongly support the fund’s 16th replenishment in 2022, Adesina advises that a funding restructure of the African Development Fund would allow the fund to go to market, leverage its $25-billion in equity, and raise an additional $33-billion in financing for low-income countries.
He reminded African leaders that they had asked for re-allocated IMF Special Drawing Rights (SDRs) to be channeled through the African Development Bank, a prescribed holder of SDRs.
“Passing the re-allocated SDRs for Africa through the African Development Bank will serve Africa very well, provide financial leverage, and help recapitalise other African financial institutions, many of which the bank helped to set up,” he says.
Adesina repeated his earlier calls for an African Financial Stability Mechanism to provide liquidity buffers to protect the continent against financial and economic shocks.
He points out that, while other continents have such mechanisms, Africa is the only one that does not. This led to widespread regional spill-over contagion effects and instability from Covid-19-induced financial shocks. “African economies must be protected,” he stresses.
African Union Commission chairperson Moussa Faki Mahamat says the Covid-19 pandemic has highlighted Africa’s unpreparedness for external shocks like new viruses.
He adds that Africa’s 2,1% retraction in growth has set it back and threatened the achievement of the African Union’s Agenda 2063.