The World Bank approved $500 million to support the government of Nigeria in improving its electricity distribution sector. The project will help boost electricity access by improving the performance of the Electricity Distribution Companies (DISCOs) through a large-scale metering program desired by Nigerians for a long time. In addition, financial support would be provided to private distribution companies only on achievement of results in terms of access connections, improved financial management and network expansion.
85 million Nigerians don’t have access to grid electricity. This represents 43% percent of the country’s population and makes Nigeria the country with the largest energy access deficit in the world. The lack of reliable power is a significant constraint for citizens and businesses, resulting on annual economic losses estimated at $26.2 billion (₦10.1 trillion) which is equivalent to about 2 percent of GDP. According to the 2020 World Bank Doing Business report, Nigeria ranks 171 out of 190 countries in getting electricity and electricity access is seen as one of the major constraints for the private sector.
“Improving access and reliability of power is key to reduce poverty and unlocking economic growth in the aftermath of the global COVID-19 pandemic,” says Shubham Chaudhuri, World Bank Country Director. “The operation will help improve the financial viability of the DISCOs and increase revenues for the whole Nigerian power sector, which is critical to save scarce fiscal resources and create jobs by increasing the productivity of private and public enterprises”.
The Nigeria Distribution Sector Recovery Program (DISREP) will help improve service quality, as well as the financial and technical performance of distribution companies by providing financing based on performance and reduction of losses. This project complements the support provided under the Power Sector Recovery Operation (PSRO) approved in June 2020. Specifically, it will ensure that distribution companies make necessary investments to rehabilitate networks, install electric meters for more accurate customer billing and to improve quality of service for those already connected to the grid. It will also help strengthen the financial and technical management of DISCOs to improve the transparency and accountability of the distribution sector.
“The program will only be eligible to those DISCOs that transparently declare their performance reports to public with actual flow of funds based on strict verification of achieved performance targets by an independent third party. The program would also make meters available at affordable prices to all consumers in Nigeria, a long pending demand of Nigerians,” says Nataliya Kulichenko, World Bank task team leader for the project.
The program will reduce the CO2 emissions of the Nigerian power sector by reducing technical losses, increasing energy efficiency, replacing diesel and biomass with grid-electricity, and investing more in on- and off-grid renewable energy. DISREP supports the development of regulatory guidance on climate-resilient infrastructure and facilitates inclusion of climate risks in decision making.
Mozambique: Growth Expected to Rebound by 2022
Mozambique’s economy is expected to gradually recover from 2021 but substantial downside risks remain due to uncertainty surrounding the path of the COVID-19 (coronavirus) pandemic. While the economy registered its first contraction in 2020 in nearly three decades, growth is expected to rebound over the medium-term, reaching about 4 percent by 2022.
Released today, the 6th edition of the World Bank Mozambique Economic Update: Setting the Stage for Recovery, notes that the COVID-19 (coronavirus) pandemic has hit Mozambique’s economy as it was recovering from the debt crisis and the tropical cyclones of 2019. The country’s real Gross Domestic Product (GDP) is estimated to have declined by 1.3 percent in 2020, compared to a pre-COVID-19 estimate of 4.3 percent, as aggregate demand fell and lockdown measures necessary to contain the virus disrupted supply chains. Nevertheless, the report notes, job losses and business closure, while significant, were comparatively lower than in peer countries.
“Despite concerted efforts to contain its spread and mitigate its effects, COVID-19 continues to adversely affect households and businesses, delaying the country’s progress towards the Sustainable Development Goals (SDGs),” noted Idah Z. Pswarayi-Riddihough, World Bank Country Director for Mozambique, Madagascar, Mauritius, Seychelles, Comoros. “The urban poor, who are largely engaged in the informal sector are among the hardest hit. While the impact is significant across the board, small firms are worst affected, notably those in the northern region.”
The report acknowledges that the government took swift sanitary measures, deemed largely successful in keeping cases and deaths on the lower side during the first wave. Furthermore, the authorities enacted robust fiscal and monetary policies aimed at protecting businesses and the most vulnerable. Among those, the Bank of Mozambique enacted stimulus measures, including cutting the monetary policy rate and adopting policies aimed at ensuring financial sector stability. Other crucial support included discounted credit lines to relieve firms of financial distress. Steps were also taken by commercial banks to restructure existing loans by extending maturities and offering grace periods on loan principals. Several other fiscal measures were taken to support small firms and businesses. The report calls for strengthening of these measures to address the effects of the second wave of the virus and support a resilient economic recovery.
“Indeed, continued support to households and viable businesses remains essential for resilient recovery,” noted Fiseha Haile, World Bank Senior Economist and the report’s leading author, adding that it will be key to continue providing support to the poorest and most vulnerable through social protection programs in the short-term. “More support to firms, conditioned on the protection of jobs, could help minimizing layoffs and the loss of productive capacity,” he said.
The report concludes by underlining the need to press ahead with the structural reform agenda as the pandemic subsides. In the recovery phase, policies focusing on supporting economic transformation and job creation, especially for the youth, would be critical. Targeted interventions to support women and alleviate gender inequalities as well as to harness the power of mobile technology would support sustainable and inclusive growth in the medium term.
EU to support COVID-19 vaccination strategies and capacity in Africa
The President of the European Commission, Ursula von der Leyen, has announced today €100 million in humanitarian assistance to support the rollout of vaccination campaigns in Africa, which are spearheaded by the Africa Centres for Disease Control and Prevention (Africa CDC). Subject to the agreement of the budgetary authority, this funding will support the vaccination campaigns in countries with critical humanitarian needs and fragile health systems. The funding will, among others, contribute to ensuring the cold chains, roll-out registration programmes, training of medical and support staff as well as logistics. This sum comes on top of €2.2 billion provided by Team Europe to COVAX.
President of the European Commission, Ursula von der Leyen said: “We’ve always been clear that the pandemic won’t end until everyone is protected globally. The EU stands ready to support the vaccination strategies in our African partners with experts and deliveries of medical supplies at the request of the African Union. We are also exploring potential support to boost local production capacities of vaccines under licensing arrangements in Africa. This would be the fastest way to ramp up production everywhere to the benefit of those that most need it.”
Janez Lenarčič, Commissioner for Crisis Management, said: “International vaccine solidarity is a must if we are to effectively address the COVID-19 pandemic. We are looking at ways to use our humanitarian aid and civil protection tools to help in the rollout of vaccination campaigns in Africa. Ensuring equitable access to vaccines for vulnerable people, including in hard-to-access areas, is a moral duty. We will build on our valuable experience in delivering humanitarian aid in a challenging environment, for example via the Humanitarian Air Bridge flights.”
Commissioner for International Partnerships, Jutta Urpilainen, added: “Team Europe has stood by the side of our African partners from the onset of the pandemic and will continue to do so. We have already mobilised more than €8 billion to tackle the COVID-19 pandemic in Africa. We are strengthening health systems and preparedness capacities, which is absolutely key to ensure effective vaccination campaigns. And we are now exploring support through the new NDICI and how to leverage investments in the local production capacities through the External Action Guarantee.”
The EU also has a range of instruments at its disposal, such as the EU Humanitarian Air bridge, the EU Civil Protection Mechanism, and the EU’s humanitarian budget. These tools have been used extensively in the context of COVID-19 to deliver crucial material and logistical assistance to partners in Africa.
The Commission is also currently exploring opportunities to support African countries in the medium term to establish local or regional production capacity of health products, in particular vaccines and protective equipment. This support will come under the new Neighbourhood, Development and International Cooperation Instrument (NDICI) and the European Fund for Sustainable Development plus (EFSD+).
The EU has been scaling up its humanitarian engagement in Africa since the onset COVID-19 crisis. A key of part of these efforts is the EU Humanitarian Air Bridge, which is an integrated set of services enabling the delivery of humanitarian assistance to countries affected by the coronavirus pandemic. The air bridge carries medical equipment, and humanitarian cargo and staff, providing humanitarian assistance for the most vulnerable populations where the pandemic imposes constraints on transport and logistics. The air bridge flights are fully funded by the EU. So far, almost 70 flights have delivered over 1,150 tons of medical equipment as well as nearly 1,700 medical and humanitarian staff and other passengers. Flights to Africa have aided the African Union, Burkina Faso, Central African Republic, Chad, Côte d’Ivoire, Democratic Republic of Congo, Guinea Bissau, Nigeria, São Tomé and Príncipe, Somalia, South Sudan, Sudan.
20th International Economic Forum on Africa
The global economic recession triggered by COVID-19 is hitting African countries hard. In 2020, 41 African economies experienced a decline in their gross domestic product (GDP). Although situations vary across the continent, this crisis has made clear that post-COVID strategies need to tackle two major obstacles to Africa’s long-term sustainable growth: dependence on external markets, and the incapacity of the formal economic sectors to create enough quality jobs.
The African Continental Free Trade Area (AfCFTA), now open for business, provides a platform to accelerate productive transformation, create regional value chains and spur continental integration. Its effective implementation, however, depends on African economies’ capacity to create fiscal space and boost private investment in quality infrastructure and sustainable projects.
What are the key priorities for implementing the AfCFTA and accelerating Africa’s productive transformation? How can African governments strengthen their borrowing capacity and improve their debt management? How can bilateral and multilateral co-operation facilitate the process? The 2021 edition of the Forum will gather all key actors to share their views and solutions for action.
The Forum hosts Europe’s largest annual conversation on Africa’s ongoing, formidable transformation. It invites African and OECD policy makers, investors, academics, civil society and international organisations to share their views, and discuss how better policies can improve development outcomes for Africans and the world.
To host the Forum, the Government of Senegal, is teaming up with the Development Centre of the Organisation for Economic Co-operation and Development; and the African Union, along with partners Casa Africa, le Cercle des Economistes, the French Development Agency (AFD) and the Sahel and West Africa Club (SWAC).
The debates will build on the findings of the recently launched Africa’s Development Dynamics 2021, a report by the African Union Commission, produced in collaboration with the OECD Development Centre.
Honourable speakers include:
- Macky Sall, President of the Republic of Senegal
- Andry Rajoelina, President of the Republic of Madagascar
- Toshimitsu Motegi, Minister for Foreign Affairs of Japan
- Angel Gurría, Secretary-General, Organisation for Economic Co-operation and Development
- Moussa Faki Mahamat, President, African Union Commission
- Ibrahim A. Mayaki, Chief Executive Officer, African Union Development Agency (AUDA/NEPAD)
- Arkebe Oqubay, Senior Minister and Special Adviser to the Prime Minister of Ethiopia
- Wamkele Mene, Secretary-General, AfCFTA Secretariat
- Jean Hervé Lorenzi, President, Cercle des Economistes
- Rémy Rioux, Director-General, Agence Française de Développement
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