#Africa50: Why Investing in Digital Infrastructure post-COVID-19 is Critical to Africa’s Recovery

#Africa50: Why Investing in Digital Infrastructure Post-COVID-19 is Critical to Africa’s Recovery

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A three-member independent review panel led by former Irish President Mary Robinson says they are satisfied with the submissions of the internal probe carried out by the ethics committee of the African Development Bank, thus clearing the president of the bank, Akinwumi Adesina of all 16 allegations levelled against him by unidentified whistle-blowers in January this year, accusing him of unethical conduct and questionable appointments. Financial Derivatives CEO, Bismarck Rewane joins CNBC Africa for more.

Independent panel clears AfDB’s Adesina of all allegations

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Updated forecasts from the African Development Bank show that Africa’s growth is expected to rebound to 3 per cent by 2021 from a 3.4 per cent contraction in 2020 in the worst-case-scenario. Hanan Morsy, Director for Macroeconomic Forecasting and Research at the AfDB joins CNBC Africa for more.

AfDB forecasts Africa’s growth in 2021

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According to the African Development Bank’s revised African Economic Outlook, though the continent is expected to rebound next year; it could lose a quarter of a trillion dollars in economic output for the rest of this year and 2021. Nnenna Nwabufo, Acting Director-General of East Africa Regional Office at the AfDB joins CNBC Africa for more.

AfDB’s Nnenna Nwabufo on how COVID-19 has impacted African economies

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The African Development Bank says an additional 49 million Africans could be pushed into extreme poverty by the Covid-19 pandemic and its aftermath. This was in the updated forecast of the Africa Economic Outlook, where they expect Central Africa and West Africa to be the hardest-hit regions. Kayode Akindele, Partner at TIA Capital joins CNBC Africa for more.

How COVID-19 could condemn millions of Africans into extreme poverty

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As Nigeria continues the grapple with the COVID-19 shock, Africa’s largest economy has received a new boost of $288.5 million from the African Development Bank to help reduce the impact of the pandemic on people and businesses. This comes as the bank recently concluded its country strategy paper for Nigeria for the next 4 years. Ebrima Faal, Senior Director of the Nigeria Country Department, of the African Development Bank joins CNBC Africa’s Kenneth Igbomor to share more details on the bank’s plan and strategy for Nigeria.

AfDB boosts Nigeria’s COVID-19 fight with $288.5mn

ABIDJAN (Reuters) &#8211; The <a href="https://www.cnbcafrica.com/west-africa/2020/06/03/nigerias-president-backs-embattled-african-development-bank-chief/">African Development Bank’s (AfDB)</a> board on Thursday said it stood by an internal investigation that had cleared its president of improper conduct, but it would carry out an independent review of the report in the interest of due process.



AfDB President Akinwumi Adesina has been accused of abuse of office by a whistleblower at the bank, including favouritism in hiring. He has denied the allegations and a report by the bank’s ethics board cleared him of wrongdoing.



The United States, AfDB’s second-largest shareholder, has demanded a new independent probe into the allegations, rejecting the bank’s investigation over reservations about the integrity of the bank’s process. Meanwhile, top shareholder <a href="https://www.cnbcafrica.com/videos/2020/06/04/understanding-nigerias-debt-strategy-4/">Nigeria</a> has voiced its support for Adesina.



In a statement, AfDB’s board of governors said it believed the bank’s ethics committee, which produced the report, had carried out its role correctly. But the board has nevertheless agreed to authorise a review.



“The independent review shall be conducted by a neutral high caliber individual with unquestionable experience, high international reputation and integrity,” it said.



On Tuesday, Nigerian President Muhammadu Buhari gave his backing to Adesina in his bid for a second term as AfDB president despite the allegations.



Adesina later this year plans to pursue a second term as the head of the multilateral lender, which is headquartered in Ivory Coast’s commercial capital Abidjan.



The board said the review of the investigation would take no more than four weeks and not interfere with the bank’s electoral calendar.



The bank’s whistle-blowing and complaints handling policy will also be reviewed at a later date to ensure it is being properly implemented, it said.



(Reporting by Bate Felix; Additional reporting by Ange Aboa; Writing by Alessandra Prentice; Editing by Sam Holmes)



This article was first published on Reuters <a href="https://www.reuters.com/article/us-africa-bank-idUSKBN23B3HG">https://www.reuters.com/article/us-africa-bank-idUSKBN23B3HG</a> and is republished with its permission.



For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>

AfDB board stands by embattled President Adesina

African Development Bank board stands by embattled President Adesina

While hosting <a href="https://www.cnbcafrica.com/videos/2020/04/09/afdb-announces-10bn-war-chest-to-fight-covid-19/">African Development Bank</a> (AfDB) President Akinwumi Adesina on a courtesy visit at State House on Tuesday, Nigerian President <a href="https://www.cnbcafrica.com/videos/2020/06/01/grading-buharis-economic-performance-over-the-past-5-years/">Muhammadu Buhari</a> said the country will support Adesina in his bid to get re-elected as President of the multilateral bank.



This follows several <a href="https://www.cnbcafrica.com/west-africa/2020/06/01/stop-this-culture-of-frivolous-allegations-former-world-bank-treasurer-arunma-oteh-defends-african-development-bank-president/">allegations of misconduct</a> against Adesina at the financial institution, of which he has denied.



The following statement provides further details:



PRESIDENT BUHARI TO AfDB PRESIDENT, ADESINA: I’LL STAND BY YOU



President Muhammadu Buhari says Nigeria will stand solidly behind Dr Akinwumi Adesina in his bid to get re-elected as President of the African Development Bank (AfDB)



The President spoke at State House, Abuja, Tuesday, while hosting Dr Adesina on a courtesy visit.



“In 2015, when you were to be elected for the first term, I wrote to all African leaders, recommending you for the position. I didn’t say because you were a People’s Democratic Party (PDP) Minister, and I belonged to the All Progressives Congress (APC), so I would withhold my support. I’ll remain consistent with you, because no one has faulted the step I took on behalf of Nigeria,” said President Buhari.



The President pledged that Nigeria would work with all other leaders and stakeholders in AfDB to ensure that Dr Adesina was elected for a second term built on the record of his achievements during his first term.



The African Union had already endorsed the incumbent AfDB President as sole candidate for the continent, but some other stakeholders are trying to ensure that Dr Adesina is re-investigated on some allegations, and rendered ineligible to run.



Giving a background to what was happening in the bank, Dr Adesina, a former Nigerian Minister for Agriculture, said the 16 allegations raised against him were trumped up, “and without facts, evidence, and documents, as required by the rules and regulations of the bank.”



He added that the Ethics Committee of the bank cleared him of all the allegations, and calls for fresh investigation by the United States of America, were against the rules.



“My defense ran into 250 pages, and not a single line was faulted or questioned. The law says that report of the Ethics Committee should be transmitted to the Chairman of Governors of the bank. It was done, and the governors upheld the recommendations. That was the end of the matter, according to the rules. It was only if I was culpable that a fresh investigation could be launched. I was exonerated, and any other investigation would amount to bending the rules of the bank, to arrive at a predetermined conclusion,” Dr Adesina said.



Stressing that the motive was to soil his name, and that of the bank, the AfDB President said he was proud to be Nigerian, and thanked President Buhari for his unflinching support.



“You helped me to get elected in the first place, and you have supported me robustly all along, and the African Union unanimously endorsed my re-election” he declared.



While commiserating with President Buhari on the death of the former Chief of Staff, Mallam Abba Kyari, Dr Adesina described Professor Ibrahim Gambari, new Chief of Staff as “a man of integrity, and of global standing.”

President Buhari to AfDB President Adesina: “I’ll stand by you”

By Dr Adrian Saville, CE, Cannon Asset Managers



In September 2006, economics professor Nouriel Roubini warned an incredulous audience of fellow economists at the International Monetary Fund (IMF) that the US housing market was at risk of collapsing – an event that could ruin the global financial system. This was at a time when the global economy had recorded its fastest patch of growth in 30 years and, in the space of a decade, US house prices had doubled, making for the sturdiest gain in house prices in the post-war era.



Unfortunately, Roubini was right. Soon after his address, the global financial crisis (GFC) struck, and the little-known scholar of emerging markets quickly became the Wall Street celebrity “Dr Doom”.



The lessons learned from the GFC encouraged policymakers worldwide to work furiously to get economies back into shape through a series of fierce and co-ordinated policy responses to the impacts of Covid-19. In turn, this has encouraged a consensus view amongst economists that the recovery from the crisis will be V-shaped. Wall Street&nbsp; agrees, with the S&amp;P500 and NASDAQ having rebounded sharply since March’s meltdown. In fact, it seems that markets anticipate that the bold responses from the world’s leading policymakers will produce an equally fierce rebound in economies and earnings.



Groundhog Day



Yet, as if trapped in the tragicomedy of Groundhog Day, Dr Doom again disagrees with this consensus, and suggests the economic trajectory is likely to be L-shaped. Admittedly, Roubini expects an economic rebound in the pandemic’s immediate aftermath, but insists that this recovery will quickly collapse beneath the weight of the global economy’s accumulated debts, giving rise to the prospect of an economic depression.



It’s tempting to dismiss Roubini as having been “spectacularly right” the first time because he was banging on the disaster drum for many years before the GFC struck. But there is more than enough evidence in the post-pandemic makeup to suggest that we should be paying close attention to a depression scenario.



Markers for concern include a collapse in vehicle sales; the imposition of trade barriers to protect domestic markets; falling commodity prices; a wave of consumer debt thanks to easy money; a dive in the federal funds rate; a surge in unemployment; sharp market swings; deepening fiscal deficits; and the risk of a deflationary price spiral.



The risk is that Roubini is right



This list bears eerie similarity to the features that characterised the Great Depression of the 1930s. So, in deliberating on Roubini’s diagnosis and the implications for policymakers and investors, the risk is not that he is wrong, but that he is right.



We ignore this risk at our peril. In depression scenarios, conventional economic policy stops working, and markets behave differently. For example, in terms of policy, economists Lawrence Summers and J. Bradford DeLong have shown the importance of fiscal expansion – rather than fiscal prudence – in depressions.



Depressions also offer a good reason to seek and maintain some price inflation. Nominal interest rates of zero can’t be lowered much further. But the real rate of interest – the nominal interest rate minus expected inflation – can be taken far below zero by policies that push inflation rates higher.



Positioning portfolios for a depression scenario, then, means preparing for a world of higher rates of price inflation, government spending stimuli, nominal interest rates of zero, and negative real interest rates.



Diversify, diversify, diversify …



In this world, the first three rules of investing must be enforced with the strictest discipline: diversify, diversify, diversify. Portfolio diversification is a free lunch available to every investor, and the surest form of risk management.



We don’t know how or when the pandemic period will end – and we can’t be sure that Roubini is right. But diversifying your portfolio across asset classes, geographies, currencies and industries has a surer prospect of getting you to your investment destination than investment decisions that, in the absence of diversification, could be perfectly right or exactly wrong. This means gold and growth assets, not gold or growth assets; it means China and the US, not China or the US; and it means healthcare and resource stocks, not healthcare or resource stocks.



… and look for transformative assets



Additionally, investors should consider investing in transformative assets. If Roubini is right, it’s likely that even in an environment of hardship and misery, investments that are inclusive, co-operative, and collaborative will thrive. Covid-19 bonds could be one such asset, where issuers include the African Development Bank, or even the Bank of America, which has come to market with a $1 billion four-year Covid-19 bond to fund lending to hospitals, nursing facilities and healthcare manufacturers.



Then there are transformative businesses that will do better in hard times by doing good business, taking the place of current portfolios winners. In March, Kenyan telecom operator Safaricom made all person-to-person transactions under 1,000 Kenyan shillings free on the mobile money service M-Pesa. Near term, this put one-quarter of Safaricom’s revenue at risk, but long term is likely to entrench the business’s position in the payments market. Likewise, British restaurant chain Leon has reinvented itself by converting 57 sites into shops selling groceries and takeaway meals, saving 1,500 jobs and looking after 70 suppliers.



In other words, depression times do not spell the end for businesses or investors. Rather, as Joseph Schumpeter implores, our task is to create out of the destruction, by redesigning, reinforcing and reinventing.



For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>

COVID-19: Investing for Roubini’s Greater Depression

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Some former African presidents have shown their support for the president of the African Development Bank, Akinwunmi Adesina. This was in a letter over the 16 count allegations levelled against him to which Adesina had stated his innocence. Although the ethics committee of the board of directors of the continental bank has cleared Adesina of these charges, the United States which is one of the major shareholders of the bank has called for an independent probe into the allegations.

Arunma Oteh on Adesina’s probe & why COVID-19 represents an opportunity for Africa

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This year was poised to see major strides in access to finance for SMEs in Kenya. Promising initiatives such as the repeal of the interest rate cap, financing opportunities though the African Development Bank and the establishment of a credit guarantee scheme are just a few of the steps that were underway. But now that the Covid-19 pandemic has reshuffled priorities and budgets worldwide, where does that leave vulnerable Kenyan SMEs? SME Consultant, Victor Otieno joins CNBC Africa for more.

How COVID-19 is affecting SME funding in Kenya

By Jee-A Van Der Linde – Economist



The World Bank will grant Zimbabwe $7m to help fight the economic damage caused by the Covid-19 pandemic.



The Washington-based lender said it will mobilise $5m from its Global Financing Facility Trust Fund towards the outbreak and redirect roughly $2m from its ongoing Idai Recovery Project to communities in need.



The aid comes at a crucial time and despite Zimbabwe being in debt arears with numerous multilateral and bilateral lenders, which renders the country ineligible for new loans or debt forgiveness.



At the beginning of April, Finance Minister Mthuli Ncube wrote to the IMF as well as other leading international lenders, pleading for financial assistance. With more than half of the population in need of food aid and the entire world facing a health pandemic, conditions in the country have reached an acutely distressing point.



Zimbabwe can no longer go at it alone.



After having settled $107.9m of debt with the IMF in 2016, the country is still indebted to the World Bank, African Development Bank (AfDB), and European Investment Bank (EIB), while significant amounts are also owed to other creditors, both within the Paris Club and outside.



The debt situation is precarious, with total external debt (largely in the form of government debt) having ballooned to over $8bn, according to the Ministry of Finance (MoF).



The reasons for this come down to years of economic mismanagement and frequent policy errors.



That said, Zimbabwe is eager to restructure and repay its debt obligations in order to become eligible for new loans. Minister Ncube has previously said that settling arrears will help elevate the country’s credit standing, but a series of external shocks and policy missteps have impeded the process.



When considering Zimbabwe’s tremendous financing needs, the $7m – ZWL$125m at the current 25:1 fixed exchange rate with the greenback – is but a drop in the proverbial bucket and falls at the lower end of what the IMF and World Bank have afforded other African nations.



Although any bit of aid will help at this stage, Zimbabwe’s problems are far from over and it will need more assistance going forward.



NKC’s analysis shows that Zimbabwe will be among the continent’s main economic laggards this year, joining the ranks of oil producing nations which have arguably been the hardest hit by the global pandemic.



Simply put, Zimbabwe’s economy will suffer a very deep contraction in 2020, akin to levels last seen over a decade ago.



That said, conditions can only deteriorate so far and serious intervention will need to take place at some point.



For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>

Zimbabwe tightens coronavirus lockdown in capital Harare as cases hit 203

Op-Ed: World Bank opens its purse to Zimbabwe, but hands out pennies

HARARE (Reuters) &#8211; The World Bank will grant $7 million to Zimbabwe to help it fight the new <a href="https://www.cnbcafrica.com/videos/2020/04/30/morgan-co-on-covid-19-its-impact-on-zimbabwes-economy/">coronavirus outbreak</a> that is expected to worsen an already struggling economy and <a href="https://www.cnbcafrica.com/news/2020/04/02/the-fight-to-keep-4-1-million-zimbabweans-fed-in-covid-19-lockdown/">food crisis</a>, a bank spokesman said on Wednesday.



Zimbabwe is more than $1.2 billion in arrears to the <a href="https://www.cnbcafrica.com/videos/2020/04/09/world-bank-considers-debt-relief-for-africa-to-fight-covid-19/">World Bank</a>, <a href="https://www.cnbcafrica.com/videos/2020/04/09/afdb-announces-10bn-war-chest-to-fight-covid-19/">African Development Bank</a> and European Investment Bank, making it ineligible for funding or debt forgiveness from global lenders.



The World Bank spokesman said that while Zimbabwe and other countries indebted to the lender could not access regular financing, they could get money from its trust funds to fight the coronavirus that has slowed down the <a href="https://www.cnbcafrica.com/videos/2020/05/05/covid-19-what-the-world-can-learn-from-africa-in-dealing-with-a-pandemic/">global economy</a>.



“The bank’s senior management has underlined the need for additional trust fund financing to ensure that Zimbabwe and the small group of other countries in arrears can receive support as part of our global effort to help countries respond to the COVID-19 crisis,” the spokesman said.



Zimbabwe would get $5 million from the World Bank’s global financing facility trust and another $2 million would be diverted from <a href="https://www.cnbcafrica.com/videos/2020/05/04/how-the-covid-19-pandemic-is-taking-its-toll-on-african-livelihoods/">funds meant to help the country recover</a> from a devastating cyclone in 2019.



“We recognise this is a global crisis that impacts every country and we cannot leave anyone behind in our response,” the spokesman said.



Zimbabwe’s finance minister wrote to the International Monetary Fund and other lenders last month warning that the country was being driven towards a <a href="https://www.cnbcafrica.com/videos/2020/05/04/covid-19-lockdowns-when-is-the-right-time-to-reopen-economies/">health and economic catastrophe</a> by the coronavirus pandemic because its debt arrears mean it cannot access foreign financing.



The impoverished southern African nation has only recorded 34 cases and four deaths from the coronavirus but analysts say its fragile health system will not be able to handle any surge in infections.



(Reporting by MacDonald Dzirutwe; Editing by Mark Heinrich)



This article was first published on Reuters Africa <a href="https://af.reuters.com/article/investingNews/idAFKBN22I1QX-OZABS">https://af.reuters.com/article/investingNews/idAFKBN22I1QX-OZABS</a> and is republished with its permission.



For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>

Zimbabwe gets $7m COVID-19 lifeline from World Bank

By Akinwumi A. Adesina



We are in a battle against time to curb the COVID-19 pandemic. While tackling the Coronavirus pandemic has grabbed global attention, a new crisis that could claim a lot more lives is brewing in Africa: massive locust invasions.



Billions of desert locusts are ravaging countries all across East Africa, including Kenya, Somalia, Ethiopia, Sudan, South Sudan, Uganda, and Djibouti. It has been reported that their numbers are likely to increase by up to 400 times by June 2020, reaching crisis levels.



The Food and Agriculture Organization of the United Nations (FAO) has estimated that unless quickly controlled, 5 million additional people in East Africa will be hungry by June.



An unprecedented race against time has begun to urgently stop the progression and potentially devastating impact of the deadly twins: COVID-19 and the locusts for millions in Africa.



We all know that rains are good for crops. But then when good rains also caused favorable breeding environments for locusts, the joy of rains has suddenly turned hopes of expected plenty into glooms of hunger.&nbsp; Is the best of times becoming the worst of times?



Locust breeding populations have increased massively. The locust plague moves with devastating effects: imagine a carpet of locusts of up to 150 million locusts covering a square kilometer. And think about it, that they can consume crops in one day that can feed approximately 35,000 people. In East Africa, where FAO estimates that some 20 million people are already food insecure, the effects will be devastating.



The locust crisis emerges as the continent is dealing with the COVID-19 pandemic. These are tough odds to face.



Today, distressfully, choices for millions of the poor are oddly similar: to stay in confinement and escape dying from Coronavirus or dying from hunger staying at home.



It is already playing out. Food riots broke out a few days ago in Kibera, the largest slum in Kenya, as people trampled over each other, defying social distancing &#8211; prescribed to stem the spread of the Coronavirus &#8211; to get food. Coronavirus could kill, but hunger kills many more people.



With the lockdowns for the COVID-19 pandemic, pest control workers are largely unable to go out to spray. While restrictions have been lifted to allow aircrafts used to spray to operate, they can do little as they are largely unable to get access to the chemicals, due to disruption of supply chains.



It appears that those who escape the COVID-19 will soon face LOCUST-19. In East Africa alone, the number of hungry people could jump to 30 million people.



There are several lifesaving recommendations we can act on now. These include one, the creation of a &#8220;green channel&#8221; for the free flow of food and agricultural inputs and pesticides to control pest attacks. Two, putting in place measures to prevent food price hikes by releasing food from government grain reserves and implementing anti-hoarding policies. Three, rapidly scaling up food production technologies, including high-yielding, early-maturing, drought-tolerant, disease- and pest-resistant staple crops, and programs such as the African Development Bank’s flagship program, the Technologies for African Agricultural Transformation (TAAT) initiative.



The good news is that the African Development Bank has joined the FAO as the frontrunners in this unprecedented race against time. The Bank has just approved a $1.5 million grant to the Intergovernmental Authority on Development (IGAD) and the FAO to support efforts to spray against the locusts and safeguard livelihoods in the East and the Horn of Africa. More help will be needed.



The last thing Africa needs now, as we are battling with the COVID-19 pandemic, is a hunger pandemic.



COVID-19 has taken the international community on an unpredictable journey. Thankfully, we can preclude and halt the locust crisis. For that to happen, we all must rally around the FAO to provide the $153 million needed.



COVID-19 cannot be followed by LOCUST-19.



For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>

Op-Ed: Africa cannot afford LOCUST-19

By Banji Oyelaran-Oyeyinka



The COVID-19 pandemic, one of the world’s most significant events, has resulted in cessation of economic activities that will lead to a significant decline in GDP, an unprecedented social disruption, and the loss of millions of jobs. According to estimates by the African Development Bank, the contraction of the region’s economies will cost Sub-Saharan Africa between $35 billion and $100 billion due to an output decline and a steep fall in commodity prices, especially the crash of oil prices.



More fundamentally, the pandemic has brutally exposed the hollowness of African economies on two fronts: the fragility and weakness of Africa’s health and pharmaceutical sectors and the lack of industrial capabilities. The two are complementary.



This is because Africa is almost 100 percent dependent on imports for the supply of medicines.



According to a recent McKinsey (2019) study, China and India supply 70 percent of Sub-Saharan Africa’s demand for medicine, worth $14 billion. China’s and India’s markets are worth $120 billion and $33 billion respectively. Consider a hypothetic situation where both India and China are unable or unwilling to supply the African market? Africa surely faces a health hazard.



The root of Africa’s underdeveloped industrial and health sectors can be encapsulated in three ways. First, some African policy makers simply think that poor countries do not need to industrialize. This group believes the “no-industrial policy” advocates who engage in rhetoric that does not fit the facts. The histories of both Western societies, and contemporary lessons from East Asia, run contrary to that stance.



Clearly, governments have an important role to play in the nature and direction of industrialization. Progressive governments throughout history understand that the faster the rate of growth in manufacturing, the faster the growth of Gross Domestic Product (GDP).



From the Economist magazine five years ago: “BY MAKING things and selling them to foreigners, China has transformed itself—and the world economy with it. In 1990 it produced less than 3% of global manufacturing output by value; its share now is nearly a quarter. China produces about 80% of the world’s air-conditioners, 70% of its mobile phones and 60% of its shoes. Today, China is the world’s leader in manufacturing and produces almost half of the world’s steel.” The keyword is “making”.



Two, rich countries therefore became rich by manufacturing and exporting to others, including high-quality goods and services. Poor African countries remain poor because they continue to produce raw materials for rich countries. For example, 70% of global trade in agriculture is in semi-processed and processed products. Africa is largely absent in this market while the region remains an exporter of raw materials to Asia and the West.



Lastly, African countries are repeatedly told that they cannot compete based on scale economy, and as well, price and quality competitiveness because China will outcompete them. For this reason, they should jettison the idea of local production of drugs, food and the most basic things.



The question is: &nbsp;How did Vietnam, with a population of 95 million, emerge from a brutal 20-year war and lift more than 45 million people out of poverty between 2002 and 2018 and develop a manufacturing base that spans textiles, agriculture, furniture, plastics, paper, tourism and telecommunications? It has emerged as a manufacturing powerhouse, becoming the world’s third-largest exporter of textiles and garments (after China and Bangladesh).



Vietnam currently exports over 10 million tonnes of rice, coming third after India and China.



How is it that Bangladesh, a country far poorer than many African countries, is able to manufacture 97% of all its drugs demand, yet it is next door to India, a powerhouse of drug manufacturing?



The COVID-19 pandemic has exposed Africa. African leaders need to look in the mirror and ask where this continent will be in 2030 and 2063. Africa must adopt progressive industrial policies that create inclusive, prosperous and sustainable societies.



What then should be done? A three-pronged approached is urgently needed.



First, Africa needs a strong regional coordination mechanism to consolidate small uncompetitive firms operating in small atomistic market structures. With a consumer base of 1.3 billion and $3.3 trillion market under the African Continental Free Trade Area (AfCFTA), the continent has no choice but to bring together its fragmented markets.



Second, Africa needs to build better institutions, strengthen weak ones and introduce the ones missing. No better wake-up call is required than the present pandemic.



Third, one important institution that has been abruptly disrupted is the supply chain for medicines and food, for example. Logistics for transporting capital and consumer goods across the region need predictable structures. Building or strengthening supply chains involve fostering and providing regulations for long-term agreements and competences that leverage both private and public institutional challenges such as customs regulations.



Finally, development finance institutions (DFIs) such as the African Development Bank are mandated to, and are currently, trying to fill the gaps left by private financial institutions. There is an opportunity to Africa to rethink and reengineer its future. The Africa of tomorrow must look inwards for its solutions. &#8211; whether in feeding its own people, build industrial powerhouses led by African champions.



The African Development Bank stands ready to help target and push for deeper economic transformation. Africa needs to execute structurally transformative projects that generate positive externalities and social returns. Keep our eyes on the days after.



Professor Banji Oyelaran-Oyeyinka, is the Senior Special Adviser on Industrialization to the President of the African Development Bank. He is a fellow of the Nigerian Academy of Engineering and Professorial Fellow, United Nations University. His recent book is “Resurgent Africa: Structural Transformation and Sustainable Development”, UK: Anthem Press, 2020



For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>

Sub-Saharan Africa to suffer 23.1% decline in remittances in 2020 – World Bank

Op-Ed: Where will Africa be post COVID-19?

Replying to an article recently published in the French newspaper, “Le Mond”, President of the African Development Bank, Akinwumi Adesina, has denied allegations questioning the transparency and governance systems of the bank.



“The African Development Bank has a very high reputation of good governance. The Bank was rated as the 4th most transparent institution in the world by Publish What You Fund. I have strong confidence in the governance systems of the Bank put in place by the Board of Governors of the Bank,” said Adesina in a statement.



Read the full statement below:



PRESS STATEMENT BY DR. AKINWUMI ADESINA, PRESIDENT, AFRICAN DEVELOPMENT BANK April 6, 2020, ABIDJAN, COTE D’IVOIRE An article in Le Monde has come to my attention. Following its publication, I have been overwhelmed by the tremendous show of support and solidarity I have continued to receive. The African Development Bank has a very high reputation of good governance. The Bank was rated as the 4th most transparent institution in the world by Publish What You Fund. I have strong confidence in the governance systems of the Bank put in place by the Board of Governors of the Bank. The Ethics Committee of the Board of Directors is following its internal review systems and should be allowed to complete its review and work without interference from anyone or the media. I am 100% confident that due process and transparency, based on facts and evidence, will indicate that these are all nothing more than spurious and unfounded allegations. I would like all our highly dedicated Bank staff, shareholders and partners not to be moved or shaken by any of these blatantly false allegations. I will stay calm and resolute. I will not be distracted. No amount of lies can ever cover up the truth. Soon the truth will come out.&nbsp; I will continue to discharge my duties and responsibilities as President, with the highest level of professionalism, dedication and unshaken resolve, to&nbsp;lead and support the Bank’s bold mission for Africa’s accelerated development, and to help protect the continent at this time of the COVID19 pandemic.“ Dr. Akinwumi A. Adesina President, African Development Bank

African Development Bank President denies allegations of ill-governance

By Akinwumi Adesina, President of the&nbsp;<a rel="noreferrer noopener" href="https://www.afdb.org/en" target="_blank">African Development Bank</a>



These are very difficult days, as the world faces one of its worst challenges ever: the novel coronavirus pandemic. And it seems almost no nation is spared. As infection rates rise, so does panic across financial markets, as economies drastically slow down, and supply chains are severely disrupted.&nbsp;



Extraordinary times call for extraordinary measures. As such, it can no longer be business as usual.&nbsp;



FOR MORE ON COVID-19 VISIT:&nbsp;<a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>



Each day, the situation evolves and requires constant reviews of precautionary measures and strategies. In the midst of all this, we must all worry about the ability of every nation to respond to this crisis. And we must ensure that developing nations are prepared to navigate these uncharted waters fully.&nbsp;



That&#8217;s why I support the UN Secretary-General Antonio Guterres&#8217; urgent call for special resources for the world&#8217;s developing countries.&nbsp;



In the face of this pandemic, we must put lives above resources and health above debt. Why? Because developing economies are the most vulnerable at this time. Our remedies must go beyond simply lending more. We must go the extra mile and provide countries with much-needed and urgent financial relief &#8211; and that includes developing countries under sanctions.&nbsp;



For decades, sanctions have decimated investments in public health care systems in quite a number of countries<a href="#_ftn1">[1]</a>.&nbsp;Today, they are unable to face up to a clear and present danger that now threatens our collective existence<a href="#_ftn2">[2]</a>.



Only those that are alive can pay back debts.&nbsp;&nbsp;



Sanctions work against economies but not against the virus. If countries that are under sanctions are unable to respond and provide critical care for their citizens or protect them, then the virus will soon &#8220;sanction&#8221; the world.



In my Yoruba language, there is a saying, &#8220;be careful when you throw stones in the open market. It may hit a member of your family.&#8221;&nbsp;&nbsp;



That&#8217;s why I also strongly support the call by the UN Secretary-General that debts of low-income countries be suspended and in these fast-moving and uncertain times.&nbsp;



But I call for even bolder actions, and there are several reasons for doing so.&nbsp;



First, the economies of developing countries, despite years of great progress, remain extremely fragile and ill-equipped to deal with this pandemic. They are more likely to be buried with the heavy fiscal pressure they now face with the coronavirus.&nbsp;



Second, many of the countries in Africa depend on commodities for export earnings. The collapse of oil prices has thrown African economies into distress. They simply are not able to meet budgets as planned under pre-coronavirus oil price benchmarks<a href="#_ftn3">[3]</a>.



The impact has been immediate in the oil and gas sector, particularly affecting eight countries -Algeria, Angola, Chad, Egypt, Equatorial Guinea, Gabon, Nigeria, and the Republic of Congo- that between them generate nearly half of Africa&#8217;s GDP<a href="#_ftn4">[4]</a>.&nbsp;



Those exporting other commodities besides oil, such as agricultural produce or minerals and metals, are facing drastic cuts in demand<a href="#_ftn5">[5]</a>. In the current environment, there is an acute shortage of buyers who, for understandable reasons, have re-allocated resources to addressing the COVID-19 pandemic. African countries that depend on tourism receipts as a key source of revenue are also in a straight-jacket.&nbsp;



Third, while rich countries have resources to spare, evidenced by trillions of dollars in fiscal stimulus, developing countries are hampered with bare-bones resources.&nbsp;



The fact is, if we do not collectively defeat the coronavirus in Africa, we will not defeat it anywhere else in the world. This is an existential challenge that requires all hands to be on deck. Today, more than ever, we must be our brothers and sisters&#8217; keepers.&nbsp;&nbsp;



Around the world, countries at more advanced stages in the outbreak are announcing liquidity relief, debt restructuring, forbearance on loan repayments, relaxation of standard regulations and initiatives. In the United States, packages of more than $2 trillion have already been announced, in addition to a reduction in Federal Reserve lending rates and liquidity support to keep markets operating. In Europe, the larger economies have announced stimulus measures in excess of 1 trillion Euros. Additionally, even larger packages are expected.&nbsp;



As developed countries put in place programs to compensate workers for lost wages for staying at home for social distancing, another problem has emerged &#8212; fiscal distancing.



Think for a moment what this means for Africa.&nbsp;



The African Development Bank estimates that COVID-19 could cost Africa a GDP loss between&nbsp;$22.1 billion (see attached Bank report), in the base-case scenario, and $88.3 billion in the worst-case scenario. This is equivalent to a projected GDP growth contraction of between 0.7 and 2.8 percentage points in 2020. It is even likely that Africa might fall into recession this year if the current situation persists.



The Covid-19 shock will further squeeze fiscal space in the continent as deficits are estimated to widen by 3.5 to 4.9 percentage points, increasing Africa&#8217;s financing gap by an additional $110 to $154 billion in 2020.&nbsp;



Our estimates indicate that Africa&#8217;s total public debt could increase, under the base case scenario, from $1.86 trillion at the end of 2019 to over $2 trillion in 2020, compared to $1.9 trillion projected in a no-pandemic scenario. These figures could reach $2.1 trillion in 2020 under the worst-case scenario.



This, therefore, is a time for bold actions. We should temporarily defer the debt owed to Multilateral Development Banks and International Financial Institutions. This can be done by re-profiling loans to create fiscal space for countries to deal with this crisis.&nbsp;&nbsp;



That means that loan principals, due to International Financial Institutions in 2020, could be deferred. I am calling for temporary forbearance, not forgiveness. What&#8217;s good for bilateral and commercial debt must be good for multilateral debt.



That way, we will avoid moral hazards, and rating agencies will be less inclined to penalize any institution on the potential risk to their Preferred Creditor Status.&nbsp; The focus of the world should now be on helping everyone, as a risk to one is a risk to all. There is no coronavirus for developed countries and a coronavirus for developing and debt stressed countries. We are all in this together.&nbsp;&nbsp;



Multilateral and bilateral financial institutions must work together with commercial creditors in Africa, especially to defer loan payments and give Africa the fiscal space it needs. We stand ready to support Africa in the short term and for the long haul. We are ready to deploy up to $50 billion over five years in projects to help with adjustment costs that Africa will face as it deals with the knock-on effects of COVID-19, long after the current storm subsides.&nbsp;



But more support will be needed. Let&#8217;s lift all sanctions, for now. Even in wartime, ceasefires are called for humanitarian reasons. In such situations, there is a time to pause for relief materials to reach affected populations. The novel coronavirus is a war against all of us. All lives matter. For this reason, we must avoid fiscal distancing at this time. A stitch in time will save nine.&nbsp;&nbsp;



Social distancing is imperative now. Fiscal distancing is not.&nbsp;&nbsp;&nbsp;







<hr class="wp-block-separator"/>



<a href="#_ftnref1">[1]</a>&nbsp;(<a href="https://www.odi.org/publications/384-impact-economic-sanctions-health-well-being" target="_blank" rel="noreferrer noopener">https://www.odi.org/publications/384-impact-economic-sanctions-health-well-being</a>, page 15)



<a href="#_ftnref2">[2]</a> (<a href="https://www.ghsindex.org/" target="_blank" rel="noreferrer noopener">https://www.ghsindex.org/</a>)



<a href="#_ftnref3">[3]</a> AEO 2020&nbsp;<a href="https://www.afdb.org/en/knowledge/publications/african-economic-outlook" target="_blank" rel="noreferrer noopener">https://www.afdb.org/en/knowledge/publications/african-economic-outlook</a>)



<a href="#_ftnref4">[4]</a> (AEO 2020&nbsp;<a href="https://www.afdb.org/en/knowledge/publications/african-economic-outlook" target="_blank" rel="noreferrer noopener">https://www.afdb.org/en/knowledge/publications/african-economic-outlook</a>)



<a href="#_ftnref5">[5]</a> <a href="https://www.opec.org/opec_web/en/press_room/5870.htm" target="_blank" rel="noreferrer noopener">https://www.opec.org/opec_web/en/press_room/5870.htm</a>&nbsp;&#8211; <a href="https://edition.cnn.com/2020/03/08/investing/oil-prices-crash-opec-russia-saudi-arabia/index.html">https://edition.cnn.com/2020/03/08/investing/oil-prices-crash-opec-russia-saudi-arabia/index.html</a>

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African Development Bank

#Africa50: Why Investing in Digital Infrastructure Post-COVID-19 is Critical to Africa’s Recovery

Independent panel clears AfDB’s Adesina of all allegations

AfDB forecasts Africa’s growth in 2021

AfDB’s Nnenna Nwabufo on how COVID-19 has impacted African economies

How COVID-19 could condemn millions of Africans into extreme poverty

AfDB boosts Nigeria’s COVID-19 fight with $288.5mn

African Development Bank board stands by embattled President Adesina

President Buhari to AfDB President Adesina: “I’ll stand by you”

COVID-19: Investing for Roubini’s Greater Depression

Arunma Oteh on Adesina’s probe & why COVID-19 represents an opportunity for Africa

How COVID-19 is affecting SME funding in Kenya

Op-Ed: World Bank opens its purse to Zimbabwe, but hands out pennies

Zimbabwe gets $7m COVID-19 lifeline from World Bank

Op-Ed: Africa cannot afford LOCUST-19

Op-Ed: Where will Africa be post COVID-19?

African Development Bank President denies allegations of ill-governance

Op-Ed: Why the COVID-19 pandemic is no time for fiscal distancing

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