The coming months will be challenging, but they also present an opportunity to implement reforms and interventions that contribute to inclusive and long-term growth
Covid-19 reversed the downward trend in global poverty for the first time in a generation. Global poverty is projected to push more than 100 million people into extreme poverty, of which a third are in Sub-Saharan Africa, where 40 percent of the population already lives in extreme poverty.
Even if we witness a global economic recovery this year, we cannot expect a dramatic reversal in poverty levels due to the long-term damage caused by Covid-19. The pandemic is expected to reduce potential global growth and will require, in the future, fiscal adjustments to address rising levels of debt in many countries in eastern and southern Africa. The coming months represent an opportunity to implement reforms and interventions that contribute to more inclusive long-term growth.
Vaccination campaigns in the region should continue to be a priority for countries to achieve herd immunity (70% of the vaccinated population), which will allow them to ease social distance and mobility restrictions and begin to reactivate their economies. The World Bank is a constant partner for these countries to support these efforts.
In Rwanda, we recently approved a $ 30 million operation (half of which are concessions) to purchase and deploy Covid-19 vaccines to 1.3 million people. This is one of the three vaccination operations already approved (the other two are for Ethiopia and Eswatini) and are among the 16 being prepared in the region.
Infrastructure and trade
As we accelerate Covid-19’s response, we must accelerate the building blocks of investing in sustainable infrastructure.
This means that governments must work to achieve robust legal frameworks, transparency and regulatory security for infrastructure sectors.
These pillars will attract additional private investment in infrastructure, providing the fiscal stimulus and jobs that countries need. In the Democratic Republic of Congo, we are working with the authorities using resources from a $ 500 million operation (half of which are donations) to expand and improve the existing infrastructure, as well as to create socioeconomic opportunities for the population through the provision of temporary employment services. and skills training.
Another example of where countries rely on public infrastructure for economic recovery is the joint effort by the Horn of Africa, which aims to improve roads in major commercial corridors, starting with Isiolo-Mandera in Kenya.
It is being supported by a US $ 750 million operation and, in addition to building the new infrastructure and improving road safety, the project is expected to contribute to an expansion of trade between countries, increasing coordination, reducing costs and downtime. trade and developing current regional value.
Although significant efforts are being made for vaccination and economic recovery, the World Bank is also helping countries to ensure that vulnerable populations are not left behind. In the coming months, support for education will be essential, as children from poorer families are likely to face more challenges with distance learning and will permanently drop out of school, especially girls.
In Angola, a US $ 250 million project aims to empower and educate girls, who are often excluded from the development process because of early pregnancy.
Deeper debt relief
In Sudan, a country that is restoring relationships with international financial institutions and experiencing a delicate economic situation, we are providing $ 820 million in donations to make money transfers and improve safety net systems to support families so that the country can reconstruct itself in an inclusive way.
It is also worth mentioning three other initiatives to support economic recovery:
The Debt Service Suspension Initiative (DSSI) allows eligible countries to request a temporary suspension of debt service payments due to official bilateral creditors. The Common Framework for Debt Handling in addition to the DSSI focuses on countries that need deeper debt relief (solvency issues) and facilitates debt restructuring on a case-by-case basis.
The International Development Association’s 20th replenishment – through which the World Bank offers grants and concessional loans to low-income countries – is expected to increase the availability of finance in the coming years by more than $ 12 billion.
Covid-19 is a once-in-a-lifetime pandemic that has brought great challenges and affected all of us, especially the poor and the most vulnerable. We have a significant opportunity to focus on building resilient and inclusive recovery in East and Southern Africa.
The author is the Director of Strategy and Operations for the World Bank for Eastern and Southern Africa.