Africa Economic Outlook - AFC and Afreximbank - Session 3
On Tuesday, February 23, 2021, CCA hosted the final installation the 2021 Africa Economic Outlook series.The three-part series provided our stakeholders the chance to hear experts and leaders discuss economic policies, job creation, debt alleviation, the building of resilient health and ICT infrastructure, and the effective implementation of AfCFTA.
The last session featured Dr. Rita Babihuga-Nsanze, Chief Economist Officer, Africa Finance Corporation and Dr. Hippolyte Fofack, Chief Economist and Director of Research and International Cooperation, African Export-Import Bank. The event was moderated by Managing Director and Africa Economist of Citi, Dr. David Cowan.
Florizelle Liser, CCA President and CEO, introduced the event, commending the panelists for their organizations’ efforts to support growth initiatives in spite of the pandemic.
Dr. Cowan opened the discussion by briefly describing how Africa has fared economically during the pandemic. Considering the large increase in poverty across the continent and economic contractions in most regions, Dr. Cowan suggested that, while “there has been a huge human cost, the economic cost [of the pandemic] is not good but might well be bearable.”
Building on this, Dr. Babihuga-Nsanze shared that both East and South Africa will likely see weaker economic recovery because of their reliance on tourism and public-sector debt as growth drivers. West Africa may recover faster due to its commodities being used in Chinese industrial production, access to fiscal space, and global price competitiveness. Dr. Babihuga-Nsanze emphasized that since many countries are struggling with debt repayment, stimulus or investment programs will be put on old. “Liquidity, debt, and financing I think are going to be huge themes for the continent this year,” she said.
Dr. Hippolyte Fofack highlighted Africa’s growth resiliency even during the pandemic. Six of the ten fastest-growing economies were in Africa, signaling the strength of some markets and the asymmetric impacts of the shock. In the future, Dr. Fofack expects the growth of major trading partners such as China, India, and Europe to spill over into Africa as exports rise with the implementation of the AfCTA. He noted that the AfCTA will allow Africa to take advantage of economies of scale and “become a global and productive actor in the reordering of global supply chains that we see happening as a result of the pandemic.”
As trade increases, Dr. Babihuga-Nsanze said that countries need to boost their infrastructure and manufacturing centers to take advantage of increasing trade. AfCTA’s “rules of origin” ensure manufacturing in Africa will increase alongside trade.
The session concluded with both speakers underscoring that Africa’s future is one of resiliency that springs from trade and sector diversification. In her closing remarks, Florizelle Liser echoed these sentiments and reaffirmed CCA’s commitment to fostering sustainable growth in Africa.