AfDB Disburses $3.2bn To Tackle COVID-19

The African Development Bank (AfDB) on Thursday said a total of 3.2 billion US dollars have so far been disbursed as its contribution to combating the effects of Coronavirus (COVID-19) in the African continent.

Acting Chief Economist and Vice President, Economic Governance and Knowledge Management at AfDB, Professor Kevin Urama, said the figure was part of about 7.3 billion US dollars disbursed in 2020 from the COVID-19 Crisis Response Facility to support member countries in their fight against the pandemic.

Speaking at the opening of the 17th Africa Economic Conference in Cape Verde, monitored virtually by the News Agency of Nigeria (NAN), Prof Urama said; “In 2020, the African Development Bank Group disbursed $7.3 billion, a 40 per cent increase from the $5.2 billion disbursed in 2019.

“Volumes were boosted by a rapid increase in disbursements from the COVID-19 Crisis Response Facility ($3.02 billion, or 39 per cent of the total Bank Group disbursements) as the Bank Group supported Regional Member Countries in fighting the Covid-19 pandemic.

“Over 80 per cent of the approved operations were in the form of Crisis Response Budget Support operations, prepared in response to the COVID-19 pandemic,” he said.

He added that the bank was working very hard to curb looming hunger in the region, pointing out that over 40 million Africans were said to be at the risk of hunger.

According to Urama, the AfDB, in collaboration with African Union Commission and the United Nations Economic Commission, was working to provide financial and technical assistance to beef upland governance systems.

The AfDB top shot explained that land governance was seen by many to be an influential enabler in the transformation of African food systems, adding; “Not only would this help address concerns about hunger on the continent, but it could also contribute to the generation of higher revenues by reducing a major cost of economic activity for marginalized populations.

“This is especially true for smallholder farmers, who make up more than 60% of the population of Sub-Saharan Africa with about 23 per cent of GDP coming from agriculture.

”Together with regional institutions, the African Development Bank Group is committed to building a resilient and forward-looking financial system for Africa. The pandemic provides the opportunity to creatively brainstorm on ways to improve the region’s ability to access the financial resources needed to build resilient African economies.”

Noting that the knowledge must be converted into policy actions and result in operational guidance in a timely manner, Prof Urama said the conference offered a unique opportunity to come up with practical financing solutions to recover the economic and social gains that Africa had been building for decades.

On further insights into the ravaging effects of Coronavirus, the AfDB Vice President said that since the start of the pandemic, over eight million confirmed COVID-19 cases have been recorded with more than 200,000 deaths recorded.

He also expressed concerns that the vaccination programs rollout in Africa had been slow given the emergence of new COVID-19 variants with multiple mutations thrusting many countries into another wave of the deadly virus.

For him, there has been a severe economic impact of the pandemic on Africa with GDP growth contracting as low as 1.8 per cent in 2020 – the first recession experienced by Africa in half a century.

While admitting that the pandemic had further widened the gap in meeting the socio-economic needs of Africa, Prof Urama said; “The Bank Group estimates that African governments would need about $484 billion within the next 3 years to address the socio-economic impact of the pandemic and support economic recovery.

“Government revenues are estimated to have declined on average by 10 to 15 per cent in 2020 across sub-Saharan Africa, with average revenue-to-GDP decreasing by 2 percentage points to 18 per cent in 2020, from about 2 per cent in 2019.

“For this reason, it is vital that African countries increase their tax base by addressing structural bottlenecks such as weak organizational structures, low capacity of tax officials and a lack of modern, computerized, risk-management techniques.”

Consequently, he harped on the need to move away from financing through conventional sources towards more alternative sources while also acknowledging that mobilisation of available resources would require a serious attempt to address the deficiencies of the banking and financial systems, as well as in the public sector.

However, the AfDB Vice President expressed confidence that deliberations at the conference would contribute positively to formulating the right policy agenda for the continent – NAN