Dr. Ngozi Okonjo-Iweala has stated that for Africa to have a post-pandemic economic recovery, it needs to focus on fiscal stimulus and policies geared towards reviving the services sector.
The Director-General of the World Trade Organisation disclosed this at the UBA Africa Day event themed: “Africa to the world” on Tuesday, May 25th, 2021.
What Okonjo-Iweala is saying
”First and foremost, is to solve the health problem in Africa. The next few actions on short term economic side include more fiscal stimulus into our economies.
Developed countries are recovering very fast because they have been able to implement massive amounts of fiscal stimulus.
For the rich countries, 28% of GDP, for the emerging market, 6.9% and for poorer countries, just 2%,” Okonjo-Iweala stated.
She added that for Africa to recover, the conversation on debt restructuring is important, as it gives African economies fiscal space to breathe and to enable investment, not only on the health side but also on the economic side, leading to recovery.
“We can use special drawing rights from IMF, which Africa has been allocated $34 billion, to help implement More fiscal stimulus (needed), so that economies can recover. We should also use some for liquidity for the private sector.
In richer countries, the private sector has gotten access to credit and liquidity, SMEs have been able to recover, (and) we need to do that too,” she added.
On Services sector
Dr Okonjo-Iweala added that Africa needs to revive the services sector as many of the countries depend on tourism, logistic/aviation. “How to get those industries revived, using these resources is important to get them going,” she said.
On diversification of economies and AfCFTA
The WTO DG stated that Africa must diversify its economies in order to key into the advantages that the AfCFTA provides.
“During the pandemic, commodities we depend on has seen too many fluctuations. Countries doing better on the continent are those that have more diversified economies and take advantage of the AfCFTA (African Continental Free Trade Area) to specialize some of our countries’ production, trade more with each other and outside,” she added.
In case you missed it
- Dr Ngozi Okonjo-Iweala also disclosed at the event that it is important Africa benefits from vaccine equity, to give young entrepreneurs on the continent a platform and ecosystem to thrive.