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‘Africa Needs A Bigger market To Recover From COVID,’ –Vera Songwe, Executive Secretary of the Economic Commission For Africa

At the end of the Conference of African Ministers of Finance, Planning and Development held in Dakar from May 11-17, several recommendations were made among them creating a larger market through the Africa Continental Free Trade Area in order to boost the continent’s recovery from various shocks.

Cameroon Insider sat down with the ECA chief to examine the impact of these shocks and how Africa can recover better

According to the2021 Economic Report on Africa, about 55 million Africans have been pushed to extreme poverty due to the COVID-19. How does the continent fully recover from this?

I think we are living in very difficult times on the continent, we had been celebrating that finally Africa had finally bent the curve and was clearly going down the poverty reduction (level), we passed the 50 million mark almost ten years ago. But there is a clear risk that we will go back up, not just because of the COVID crisis but a combination of the COVID crisis and of course now (the conflict in) Ukraine. How do we get out of this? Africa has demonstrated before that it can grow, it can recover from the crisis. We have never had a crisis this deep, as you know this is the first crisis with the largest contraction that the African economy has suffered in over a quarter of the century. So, how do we recover from it, we have to use the Africa Continental Free Trade Area agreement as something that creates bigger markets for us. We need to essentially recover, we need to produce, we need to sell and we need to create revenue. To do that, we have the benefit of having, thank God in good time, approved the Africa Continental Free Trade Area agreement which creates larger market for the continent. I think one of the good things that Covid has also done is re-stimulate interest in manufacturing on the continent, a lot of talk to start with about pharmaceutical manufacturing, we have over eight countries on the continent where even during Covid times have started putting in place pharmaceutical industries. Senegal used to produce polio vaccines but is now going to produce Covid vaccines and malaria vaccines and jobs will be created because they just launched a pharmaceutical pool, the constructions will create jobs and of course the vaccine production is going to create more jobs. We heard from Algeria that they have quadrupled their production of vaccines, South Africa is (also) doing that. With Covid, the African Union working with the ECA, the Afriexim Bank and the Africa CDC launched the Africa Medical Supplies platform and we are trying to bring production of drugs (together). We used to import 40 billion dollars of our pharmaceutical products to be used as commodities from outside Africa. If we could bring that back to the continent, that’s six million jobs we create, this is a couple of millions of people that will be lifted out of poverty. So there is a strategy on how we can get out of that and we now need to accompany that strategy with policies that improve our business climate…we need to improve on governance so we can get business to start, we can get business to thrive and business to do better. It is only when business thrives and does better that we really see substantial reduction in poverty.

The implementation of the AfCFTA has been met by challenges, notably the covid-19 pandemic. What reading can we make of the operational phase of the AfCTA?

Yes, there have been some challenges in the implementation of the African Continental Free Trade Agreement but I kind of disagree with you in terms of the slowness because actually what we have done during Covid is that we have worked even more…and we have arrived at an agreement on the issue of rules of origin which we did not have before COVID-19. Our ministers worked very hard and we are now at almost 87 percent of countries that have offered goods to be put into the AfCFTA basket. On the rules of origin, we have agreed on everything except the automobile sector and the textile sector. I think there is actually a convergence, of course we do need to finalise the conversations and we are working very hard to see how we can bring them together but my sense is that actually we’re continuing to move full speed ahead. Remember that the AfCFTA is built on our regional economic community agreements and in ECOWAS for example, we already have goods of inter commerce exchange. Now we are just trying to pull things together. We still have some infrastructure issues to deal with, border controls, customs regulations, customs harmonization… I think that is where we are focusing a lot of our time now. Of course with Covid we didn’t have a lot of cross borders because so many borders were closed but we have opened them now.

The conflict in Ukraine has laid the problems we have in local production and shows how dependent Africa is on the foreign market. How can local production be boosted to ensure Africa has a ready market for Africans?

I think that is the whole objective of the Africa Continental Free Trade Area agreement. We bring borders, we allow for goods on our continent to move freely but for that to happen, we need three things. One of them is, we need to know where the goods are so that they can move. (AU Chair) Macky Sall just launched the Africa Trade Exchange Platform which was designed by the AfriExim Bank, the Economic Commission for Africa and the AfCFTA Secretariat, in Ghana. The whole idea of that was meant to measure intra African trade. But with the crisis, we are going to use it to begin to sort of discover who has grain. Sometimes Malawi has maize and Liberia is suffering because they don’t have maize, or we are bringing it from Brazil. With a platform like this, we can be able to put everything that Africa is producing on that platform and allow for countries to see what is happening in Africa. Interestingly enough, Africa produces more fertilizers than it needs but we export a lot without consuming them on the continent because we don’t know where and when to get them. We have platforms like this that allow for transparency but also harmonization of the rules and regulations around, how we move goods from one country to the other. The East Africa region led by President (Paul) Kagame has put in place very clear standards and processes for trucks to move around. So today in East Africa, trucks carrying goods can do it in six days what trucks in West Africa do in 79 days.  We need to harmonise this kind of distances so that because if it takes you 79 days to be able to move something from Nigeria to Cameroon, you might as well get it from China. It is not just the production process that is a problem but it is also the infrastructure that allows good to be moved that needs to be improved so that we can actually do it in an effective way.

The conflict in Ukraine is taking a toll on African economies. Has the ECA envisaged the cost on Africa and steps to see Africa become resilient to the shocks ?

Yes, we have done a lot of work. I think as a matter of fact, we were one of the first institutions to come up with a report on the impact of the war in Ukraine on the continent. Of course, first of all we called for an end to the war. A second one is to review and revise the sanctions and to allow for Africa to still have access to grain from Ukraine, fertilizer from Russia. We have about 500 ships that are stuck in the Odessa port that need to deliver goods to the continent and if we can get some of them out now,  the UN Secretary General is working very hard to see how that can happen; we hope that it will happen. But we are seeing inflation in many of our countries…we are talking about inflation in the 20, 30 percents. This is of concern because we know that when there is inflation and it goes up that much, you start getting civil unrest because the populations do not have access to food. This is the biggest worry that we have today because it is how we can ensure that countries get the food, particularly the grain to at least stay off that problem. But that is why we often say that in good times countries should put in place good policies and so if you had good policies about social targeting or targeting mechanisms for those that are in your zoom,  (you know like the) vulnerable class then we can actually begin to target those population with the additional resources. Africa has made strides since 2008, the last food crisis, in building safety net systems but we are not there yet. We need to do more.

The economic impact of the covid-19 is hitting women in Africa harder with fears of a long-term impact on women’s economic and social empowerment which could contribute to increased vulnérability. What consideration has the ECA given to gender sustainability in the recovery from the shocks of the pandemic?

During the COVID period, many more girls, of course there was no school, were fed at school, in some countries we had school feeding programmes where the girl went to school and the family got food and this allowed the families to keep their kids in school. And now with COVID, we had some parents ‘selling their girls’ because they needed resources and that clearly is not what we need on the continent. Women are 70 percent of the cross border small micro trade. With COVID and with the lockdowns those women also saw a drop in their income which means more vulnerability and they are more prone to violence as we saw across the world, not just in Africa, an increase in the number of violence done to women during the COVID crisis. Again what we are trying to put in place is better targeting systems, quickly reviving this girls’ feeding programmes so that girls can come back to school, creating more rewards for putting them in school, because education is the best and way out of poverty. So we need to make sure that our girls get back to school quickly.

You talked about the digital economy and said Cameroon had to take advantage of the digital economy if it wants to attain emergence. How can this be done?

One of the reasons why the digital economy is very important is we have places like Buea where we have a very high concentration of artificial intelligence experts and we must use that to our advantage when we talk about Cameroon. The power of the digital technologies that come out from there is an assert we cannot ignore. We see the Elon Musks of the world and their market valuation is in trillions of dollars. Those are economies that can transform our continent and we have just launched a centre for research in artificial intelligence in Congo-Brazaville. The reason we did that in Congo-Brazzaville is because the broadband there is stable, fast, their IT is accessible and the cost are also accessible. What we need in Cameroon are those three things; broadband that works, the internet should be accessible so that many more people can use it. The numbers of Cameroon today are still below the African average in terms of access and stability. If it takes you one minute, which is a long time, in a digital space to open google then it is very difficult for you to build a business around internet services. We did a study in Kenya that showed that the businesses that did well and thrived and some of them actually grew better were countries that had access to the internet and had digitized their businesses.  Businesses that were digitized during the crisis did well, those that didn’t have access to digital technologies didn’t do as well, that is where you start finding your poverty happening.  So it is not just a question of we need it because we have, we need it because that is where prosperity is going to come from. It is an investment that is private-sector led so what we need from our government; Cameroon and many others is just policies, governance, we need to put the policies in place so that the private sector can take it over.

What should Africa retain from the CoM22?

Three things; first of all African finance ministers are working much more together, much more closer, I think our messages are beginning to become very harmonised and finally there is a clear realization and a call for the international community to review, revise and change the existing global financial architecture because it does not work for Africa.

This interview is culled from Cameroon Insider and Cameroon Business Today



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