The World Bank approved today an additional financing of $5 million from the International Development Association (IDA) to provide the small island nation of Cabo Verde with affordable and equitable access to COVID-19 vaccines. This is the first World Bank-financed operation in Africa to support a country’s COVID-19 immunization plan and help with the purchase and distribution of vaccine in alignment with the COVID-19 Vaccines Global Access (COVAX) Facility.
This additional financing will support the country’s efforts to purchase and deploy more than 400,000 doses of COVID-19 vaccine, as well as personal protective equipment including masks and other medical supplies to help ensure an effective vaccination rollout. The project will also finance cold chain equipment and transport, as well as improve health infrastructure to help reopen the country for tourism. It builds on the emergency support provided through the Cabo Verde COVID-19 Emergency Response Project.
“As a second wave of coronavirus is taking a serious toll on African lives and economies, closing down schools and businesses, we are stepping up our efforts to help our countries purchase and distribute vaccines, tests, and treatments, and strengthen vaccination systems,” says Ousmane Diagana, World Bank Vice President for Western and Central Africa. “Cabo Verde has a lot of experience in vaccination campaigns and is well prepared to start vaccine deployment this month. This is a critical step to help secure the future of the people of Cabo Verde, restore jobs and reboot the tourism industry particularly hit by the pandemic”.
The economy has been severely affected by the crisis, with GDP expected to contract by 11% in 2020. The island economy off the coast of West Africa has seen its tourism arrivals drop by 70% in 2020, unemployment reached nearly 20%, and its poverty rate more than doubled from 20% to 45% in the short term. While two thirds of the deaths occur among people over the age of 65, the young and economically active Cabo Verdeans are the most affected by the virus.
“Following months of rigorous work and great collaboration, we are quite pleased that the World Bank has approved this additional financing to help Cabo Verde purchase and distribute vaccines against the COVID 19 virus,” said Dr. Olavo Avelino Garcia Correia, Vice Prime Minister and Minister for Finances of Cabo Verde. “This financing is the necessary complement to the wide ranging and prompt measures put in place in Cabo Verde at the onset of the pandemic. We are keen to now ensure that we promptly vaccinate the population so that we can restart economic growth in a more diversified and resilient way”.
To help prepare the National COVID-19 Vaccination Plan, a COVID-19 vaccine readiness assessment was conducted by the Government of Cabo Verde with support from the World Bank, the World Health Organizations (WHO) and the United Nation Children’s Fund (UNICEF). The assessment showed that preparations are well underway, the legal framework and identification process of the target population are in place, and Cabo Verde is now eligible to make use of the COVAX Advanced Market Commitment (COVAX-AMC) as the main mechanism for purchasing vaccines.
In response to the pandemic, the World Bank Group in Cabo Verde responded swiftly and focused on three main areas to: save lives, protect the poor and build back better. As part of the health response, a $5 million emergency health operation and an additional $940,000 grant through the Pandemic Emergency Facility (PEF) helped procure essential medical equipment. In addition, a $10 million Catastrophe Deferred Drawdown Operations (CAT DDOs) was triggered to help close the fiscal financing gap unlocked by the economic shock and health response. To protect the most vulnerable, $3 million was reallocated through the Social Inclusion project and an additional financing of $10 million was approved to provide emergency cash transfers to additional families in distress. The Education and the Skills Development Enhancement project also helped purchase tablets and televisions to ensure remote learning during the lockdown. To reboot the economy, an additional financing through the access to Finance for Micro, Small, and Medium Sized Enterprises COVID-19 project is supporting small and medium enterprises to access credit. An additional $25 million was also recently approved to strengthen fiscal resilience and reform State Own Enterprises.
The World Bank, one of the largest sources of funding and knowledge for developing countries, is taking broad, fast action to help developing countries respond to the health, social and economic impacts of COVID-19. This includes $12 billion to help low- and middle-income countries purchase and distribute COVID-19 vaccines, tests, and treatments, and strengthen vaccination systems.The financing builds on the broader World Bank Group COVID-19 response, which is helping more than 100 countries strengthen health systems, support the poorest households, and create supportive conditions to maintain livelihoods and jobs for those hit hardest.
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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