News & Analysis: Fiscal policy
“Until the emergence of COVID-19, total remittance inflows into the continent has been on the rise. For instance, in 2017, remittances reached $38 billion in Africa. In 2019, total remittances to the continent amounted to $48 billion. However, with COVID-19 severely impacting both the source countries of remittances.”
“Government debt burdens across sub-Saharan Africa are rising at a faster pace and to higher levels than elsewhere in emerging markets, heightening the risk of further rating downgrades and defaults, ratings agency Fitch warned.”
“There are two main pillars to the economic sustainability plan. The first is job creation and the second an infusion of cash. These will be achieved through targeted investments in agriculture and agro-processing, manufacturing, renewable energy, housing, information technology. The proposal also included cash transfers as well as ‘survival funds’ for medium and small scale enterprises.”
“It has taken the COVID-19 crisis to push SA to this point, but finally, after years of prevarication, the government has accepted that SA’s public finances are dangerously overstretched and unprecedented spending cuts, coupled with deeper economic reforms, are needed to avoid a sovereign debt crisis.”
Malado Kaba, the former Minister of Economy & Finance of Guinea, writes, “I also believe this crisis is an opportunity, a decision point, a key moment for my country and others to strengthen transparency and accountability.”
“Madagascar has announced a stimulus package offering close to a million small businesses secure loans at below market rates to help weather the impact of the coronavirus outbreak, the government said.”
“Despite price recovery recorded last week in the international oil market, the Federal Government’s revised 2020 budget revenue stream would suffer significant pressures. This is because Nigeria will have to bear OPEC cut penalty of over 500,000 barrels per day (bpd), while production cost cutbacks has failed to materialize.”
“Zambia is reviewing its 2020 budget after a reduction in revenue as a result of the COVID-19 pandemic and other factors, Secretary to the Treasury Fredson Yamba said on Thursday. Zambia’s budgeted revenue is estimated to fall short of target by close to 20% as a result of economic adjustments due to COVID-19, the ministry of finance said in April.”
Okey Umeano, CFA. Ag., Acting Chief Economist of the Nigeria Securities & Exchange Commission, speaks to COVID-19 Africa Watch about Nigeria’s economic policy responses to the COVID-19 pandemic.
“Policymakers in low-income countries have implemented a range of fiscal measures to provide income support to the households and sectors most affected by the COVID-19 pandemic, made possible by expansionary fiscal policy and international support.”
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