NAIROBI, (The Southern African Times) – A World Bank official on Monday urged African countries to prioritise domestic resource mobilisation as compared to debt in financing their response to the COVID-19 pandemic.
Carmen Reinhart, vice president and chief economist of World Bank Group, told a virtual forum that the pandemic has created additional social spending requirements, noting that it is an opportunity for Africa to develop innovative ways to increase domestic resource mobilisation by expanding their revenue bases.
Reinhart told the Nairobi-based African Economic Research Consortium’s 54th biannual plenary session on the pandemic and public finance in Africa that most African countries entered the pandemic with limited fiscal space and higher debt levels, and are now facing prolonged economic downturns as conditions have not normalised.
The World Bank official said the prospects for tourism and other cross-border activities are unlikely to fully recover until the global pandemic situation is considered to be appropriate for normal flow of international business and travel to restart.
She observed that Africa’s gross domestic product per capita is unlikely to recover to pre-COVID-19 levels this year due to a number of factors, including the unequal access to large-scale vaccinations in the continent as compared to some developed countries.
Njuguna Ndung’u, the executive director of African Economic Research Consortium, said that the COVID-19 has exposed structural vulnerabilities of most African nations in a variety of fields ranging from health financing, social safety nets and economic diversification, and some African countries have fared better than others, depending on their initial fiscal and economic conditions before the COVID-19 pandemic.