Enjeux et défis du financement du développement dans la zone de l’Union économique et monétaire ouest-africaine post-COVID-19

Par Alain Tchibozo, Chef Economiste, Banque Ouest Africaine de Développement – BOAD

Endettement accru par les dépenses liées à la Covid-19

Le recours à l’endettement pour financer les plans de riposte et de relance économique explique principalement le fait que le déficit budgétaire des pays de l’Union Économique et Monétaire Ouest Africaine (UEMOA) se soit accru. Au plan des finances publiques, même en tenant compte d’un redémarrage de l’activité autour de 5.5% cette année (contre 1,5% en 2020), le déficit budgétaire global représenterait en 2021 près de 5,0% du PIB, après 5,4% en 2020. L’accumulation de déficits publics liés au financement de dépenses de fonctionnement des États apparaît de fait comme le principal facteur d’endettement public. Or la détérioration des finances publiques restreint l’accès futur des États à de nouveaux financements. En 2021, le service de la dette intérieure (paiement des intérêts et amortissement du principal) représentera plus de 50% du service total de la dette dans sept des huit États membres de l’UEMOA. En outre, la part des recettes publiques consacrée au service de la dette représente depuis 2020 plus d’1/3 des recettes totales dans sept États. Aussi, la question de la soutenabilité de la dette sera un enjeu crucial pour les États de la zone ces prochaines années.

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Divergent recoveries from COVID-19 in Africa require intentional action

By Anzetse Were, Senior Economist FSD Kenya

Accra, Ghana, during regional lockdown, March 2020. Photo: Shutterstock

The COVID-19 pandemic has had divergent impacts within and between economies. 2021 is already being defined by multispeed and divergent recoveries. Rich economies with USA in the lead, and China, are set for a strong recovery, mainly linked to their willingness to support incomes and deploy unprecedented fiscal and monetary support and quick COVID-19 vaccine rollouts. Low-income countries however face grimmer economic prospects due to limited access to COVID-19 vaccines and weak public finances; they will suffer more significant medium-term losses, especially affecting countries that rely on tourism and commodity exports, and those with limited policy space to respond.

In Africa, the AfDB estimates that real GDP contracted by 2.1% in 2020 with projected growth at 3.4% in 2021. Although all African economies have been affected by the pandemic, tourism-dependent economies, oil-exporting economies and other-resource intensive economies have been hit especially hard. Within countries, the sectoral impacts of COVID-19 have been varied, and women continue to be disproportionately affected by the socio-economic effects of the pandemic. This has led to divergent impacts at sector, firm and household levels. Many African households have had to resort to coping mechanisms such as reducing food consumption, dipping into savings, selling assets, looking for new forms of work, and accruing debt, with millions falling into poverty.

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COVID-19 impact on higher education in Africa

By Peter Koninckx, Strategic and Commercial Advisor, Cunégonde Fatondji, Analyst Intern, and Joel Burgos, Senior Project Manager, ShARE

Beyond the death toll and illness of millions of people due to COVID-19, businesses, healthcare, culture and education have had to cope with severe disturbances. But in our opinion, one could argue that higher-education students are amongst the most affected populations, particularly those in Africa. Although Africa is the continent with the least reported cases, the closure of higher education institutions was more widespread, and mitigation measures less effective than in other regions, according to a survey we conducted with more than 165 students across 21 African countries. No quick-fix solution exists, but the current crisis has highlighted the weaknesses in higher education in Africa, indicating where governments, international institutions, NGOs, and the private sector should focus their efforts.

Strong initial reaction to the COVID-19 crisis…

According to the Association of African Universities (IAU) Global Impact Survey on COVID-19, university closures in Africa in response to the pandemic were very effective: 77% of African universities compared to around 55% in Europe, Asia, and the Americas. However, while the percentage of higher education institutions where teaching was entirely cancelled remains low in all other regions (~3%), in Africa it is currently reported to be at 24%. Furthermore, over 40% of institutions in Africa were still developing alternative solutions at the time of the study, while other regions had already implemented them. Based on our own study, 88% of the surveyed students said that their school had discontinued in-person classes because of COVID-19.

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Time to accelerate debt relief to finance Africa’s recovery

By Marin Fouéré, Policy Analyst, OECD Development Centre and Daniele Fattibene, Research Fellow at Istituto Affari Internazionali (IAI)

The COVID-19 pandemic continues to take a heavy toll on African economies, home to the fastest growing population in the world. The burden of the crisis adds to the fact that Africa’s per capita real GDP growth over the period 2009-2019 was 1.3% per year, which is half the global average of 2.5%.

Ahead of tomorrow’s Summit on Financing African Economies, gathering African and other world leaders and international organisations, President Emmanuel Macron called for a New Deal for financing Africa’s sustainable recovery through profoundly innovative solutions.

Against this backdrop, on 9 April 2021, the OECD Development Centre and the T20 Co-Chair International Affairs Institute (IAI), engaged in a conversation to inform the G20 process, exploring how it could support African-led initiatives to leverage on new liquidity to mobilise more investment in the continent’s sustainable development.

The Italian G20 Presidency can do more to ensure international debt relief efforts are channelled towards Africa’s sustainable development. As the COVID-19 crisis intensifies pressure on fiscal resources, the international community is exploring ways to address the issue of debt sustainability above the scope of the G20’s Debt Service Suspension Initiative (DSSI) and Common Framework for Debt Treatments beyond the DSSI. These initiatives allow for 73 low-income and Least Developed Countries to request either a temporary suspension of payments or further treatment, from rescheduling to restructuring, of their public debt owed to G20 and Paris Club member countries. Although these initiatives can be considered as a step in the right direction, they will not cover the magnitude of the current crisis.

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Women and conflict in West Africa and beyond

By Dr Diene Keita, Assistant Secretary-General and Deputy Executive Director (Programme), United Nations Population Fund (UNFPA)

Photo: Fred Marie

Women are deliberately targeted in conflict

When conflict happens, the rule of law breaks down, freedom of movement is restricted, institutions and services are weakened, creating a lack of access to social services and information, and to food and livelihoods. This situation affects the entire population, but it disproportionately affects women. Research has shown that female-headed households are more vulnerable to stress and less capable of absorbing shocks, due to gender inequality, cultural restrictions and the feminisation of poverty. Conflict affects women and men differently and existing gender inequalities are compounded in times of conflict. Women and girls make up a large proportion of internally displaced populations (IDPs) and refugees. In Burkina Faso, 51% of IDPs are girls under the age of 14. Moreover, gender norms that associate masculinity with aggression make men more likely to perpetrate violence against those over whom they have power – usually women and children.

Overall, conflict increases women’s exposure and vulnerability to sexual and gender-based violence. The Sahel and West Africa Club’s publication on Women and Conflict in West Africa, shows that Islamist organisations and militias deliberately target women. In north-eastern Nigeria where Boko Haram has its roots, women are victims of systemic attacks and kidnappings, and are forced into slavery as sex slaves, informants and even fighters. Additionally, women in conflict are victims of rape and forced prostitution, pregnancy, abortion, sterilisation and marriage, as well as many other forms of sexual violence. The higher risk and exposure to sexual and gender-based violence during conflict leads to increased reproductive health problems, which, compounded with the lack of access to health services in particular in conflict settings, have a severely detrimental effect on women and girls. Age compounds gender discrimination and disparities: in conflict and post-conflict contexts, adolescent girls and young women face even higher risks. Moreover, conflict widens the gender gap in school enrolment and retention.

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Revenue mobilisation through tax transparency: Lessons from Uganda’s transformative journey

By John Rujoki Musinguzi, Commissioner General – Uganda Revenue Authority, Mary Baine,Director – Tax Programmes, African Tax Administration Forum, Zayda Manatta, Head of the Secretariat of the Global Forum on Transparency and Exchange of Information for Tax Purposes, and Marcello Estevão, Global Director, Macroeconomics, Trade & Investment, World Bank Group

Photo : © Uganda Revenue Authority

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Uganda has significantly strengthened its tax transparency and tax capacity in just a few years to mobilise more domestic resources to finance sustainable development. Moreover, the country has taken significant steps to tackle illicit financial flows by implementing global transparency and information exchange standards. The results have been impressive: USD 26 million in additional revenue has been identified since 2014 through audits and exchange of information, USD 22 million of which has already been paid to government coffers.

The case study on Uganda published today shows how tax transparency can help developing countries strengthen their tax and resource mobilisation capacities to meet the Sustainable Development Goals and the African Union’s 2063 Agenda. It also shows that Uganda’s successful journey is the result of strong political and administrative commitment, clear strategy, and coordinated and steady support from development partners.  

To fight against tax evasion, Uganda joined the Global Forum on Transparency and Exchange of Information for Tax Purposes (Global Forum) in 2012. In doing so, Uganda included exchange of information as a key component of its domestic resource mobilisation strategy to improve compliance of both multinational enterprises (MNEs) and individuals, including ones with high-net-worth. In 2016, Uganda also became a party to the Convention on Mutual Administrative Assistance in Tax Matters, the most powerful multilateral instrument for tax co-operation, with over 140 participating jurisdictions.

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Mobilisation des recettes par la transparence fiscale : Enseignements tirés du parcours transformationnel de l’Ouganda

Par John Rujoki Musinguzi, Directeur général – Autorité fiscale de l’Ouganda, Mary Baine, Directrice – Programmes fiscaux, Forum sur l’administration fiscale africaine, Zayda Manatta, Cheffe du Secrétariat du Forum mondial sur la transparence et l’échange de renseignements à des fins fiscales, et Marcello Estevão, Directeur mondial, Macroéconomie, commerce et investissement, Groupe de la Banque mondiale

© Uganda Revenue Authority

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En quelques années seulement, l’Ouganda a considérablement renforcé sa transparence et sa capacité fiscales afin de mobiliser davantage de ressources intérieures pour financer le développement durable. Pour lutter contre les flux financiers illicites, l’Ouganda a pris des mesures considérables pour assurer la mise en œuvre des normes mondiales visant à accroître la transparence et faciliter l’échange de renseignements. Les résultats ont été impressionnants, avec 26 millions USD de recettes supplémentaires identifiées depuis 2014 grâce à des vérifications fiscales et l’échange de renseignements. Sur ces recettes identifiées, 22 millions USD ont déjà été versés dans les caisses de l’État.

L’étude de cas sur l’Ouganda publiée aujourd’hui, montre comment la transparence fiscale peut aider les pays en développement à renforcer leurs capacités fiscales et leurs efforts de mobilisation des ressources intérieures pour atteindre les Objectifs de développement durable et l’Agenda 2063 de l’Union africaine. Elle montre également que le parcours réussi de l’Ouganda est le résultat d’un engagement politique et administratif fort, d’une stratégie claire et d’un soutien coordonné et constant des partenaires au développement.

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Intensifier les possibilités d’emploi dans les systèmes alimentaires pour les jeunes et les femmes en Afrique de l’Ouest

Par Koffi Zougbédé, Secrétariat du Club du Sahel et de l’Afrique de l’Ouest

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En 2011, Fatoumata Cissoko, jeune femme vivant en Guinée et diplômée en comptabilité, a lancé sa société de transformation de fruits secs avec 260 USD. Elle produit environ 16 tonnes d’ananas séché par an vendu dans de nombreux magasins et supermarchés de la capitale, Conakry, et d’autres villes du pays. Récemment, sa société a considérablement accru sa capacité de production pour améliorer sa compétitivité sur les marchés régionaux et internationaux. Fatoumata a également ouvert un restaurant bio pour compléter la chaîne de production et elle emploie directement 15 femmes. L’histoire de Fatoumata est un exemple des nombreuses opportunités d’emploi émergentes dans les systèmes alimentaires d’Afrique de l’Ouest.

Activités non agricoles – une multitude de possibilités d’emploi diversifiées              

L’économie alimentaire régionale, premier employeur d’Afrique de l’Ouest, devrait atteindre 480 milliards USD en 2030, le secteur non agricole représentant 49 % de la valeur ajoutée. En conséquence, la demande de main-d’œuvre dans les activités non agricoles se développe principalement dans les zones urbaines – pour la transformation, la commercialisation et d’autres services tels que les repas pris à l’extérieur du domicile. Ces activités sont susceptibles de créer des emplois décents et permanents, en particulier pour les jeunes et les femmes. Environ 68 % des femmes occupant un emploi travaillent dans l’économie alimentaire et, comme Fatoumata, la plupart d’entre elles évoluent dans des segments non agricoles.

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Africa’s next transformation: connecting people and places

By Jose Luis Guasch, Former Head of the World Bank Global Experts Group on PPP and Logistics, Professor Emeritus University of California, San Diego

Trucks at the border crossing between Zambia and Zimbabwe.
Photo by Rainer Lesniewski, Shutterstock

Pedro, a small farmer in the Andes, spends another sleepless night worrying about how to feed his family. He wonders how to improve the productivity of his small crop of vegetables and how to reduce time cost and losses (spoilage) in the process of taking his produce to the market. George is a small and medium enterprise (SME) entrepreneur, who exports his products. He has to face poor and bumpy roads, delays and red tape in securing permits and certifications, cumbersome custom and/or cross border procedures, lack of cooling facilities, losses due to spoilage and even theft, deficient packaging and scale consolidation, low productivity etc. That is the common plight of most SME farmers and producers in emerging economies. The costs of bringing their products to the market hover around 30% of product value, when it should and can be below 10%.

Weaknesses in transportation and logistics are a recurring theme in numerous diagnostic studies analysing the obstacles to productivity, trade and economic growth in most Latin American and African countries. Particularly burdensome are deficient trade corridors and the dismal conditions of feeder roads connecting markets, borders and ports, as well as the lack of effective logistics services.  

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Are African countries heading for a carbon lock-in or leapfrogging to renewables?

By Galina Alova, Smith School of Enterprise and the Environment, University of Oxford

Non-hydro renewables are likely to account for less than 10% of Africa’s power generation by the end of this decade. My recent co-authored study predicts fossil fuels to continue to dominate the electricity mix in many African countries, and the continent as a whole.

Opportunity to power development with renewables

Africa is presented with an important opportunity to make a decisive leap to renewables this decade. The continent’s energy demand is projected to more than double in the coming years, as countries seek to industrialise and improve the development outcomes for their growing populations, including providing affordable power to close the energy access gap. At the same time, Africa – the land of sun and wind – possesses vast renewable energy resources.  

Against this backdrop, renewables have become increasingly more competitive in the past years, with their cost set to decline further compared to conventional fossil-fuel-based generation. The affordability of battery storage has also significantly improved, with lithium-ion battery packs hitting a record low in 2020.

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