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.
Investing in Key Sectors to Help Nigeriens Recover From the Health and Security Crises
The Covid-19 pandemic crisis and the security situation continue to undermine the Nigerien economy, wiping out years of hard-won gains in poverty reduction. A number of fiscal policy options are, however, available to help the country enhance public expenditure efficiency and increase its GDP by up to 2%. These are the findings of the World Bank’s latest economic and poverty update for Niger published today.
The report titled “Maximizing Public Expenditure Efficiency for Rebuilding Better” analyzes the impact of the health and security crises on Niger’s economy. The economy grew by 5.9% in 2019, but slowed to 3.6% in 2020, as a result of the combined impact of these crises. This sharp downturn increased poverty levels and pushed an additional 400,000 people into extreme poverty.
“Nigeriens have been hard hit by the volatile security situation and these long months in the pandemic, with hundreds of thousands of children being kept out of school and deprived of proper health care, which will adversely affect their future,” notes Joelle Dehasse, World Bank Country Manager for Niger. “Turning this situation around will require massive and effective investments in human capital over the next few years.”
The report notes that these investments must be accompanied by bold structural and sectoral reforms aimed, among other things, at mobilizing more domestic resources, modernizing the administration, including the civil service, and promoting sound, prudent, and transparent government spending.
The projections for 2021 are nevertheless positive and economic growth is expected to rebound to 5.5%, driven by the reopening of the border with Nigeria, the resumption of large investment projects, and the normalization of several supply chains. However, these projections remain subject to the duration of the pandemic and the availability of vaccines, as well as to climate hazards and their impact on agricultural production and livelihoods.
“The government of Niger has made tremendous progress in recent years in managing its public finances, giving high priority to social spending,” says Paolo Di Lorenzo, World Bank Senior Economist and co-author of the report. “However, public expenditure pressures remain high, partly due to the deteriorating security situation. Against this backdrop, the authorities should take further steps to improve domestic resource mobilization and public spending efficiency.”
The report’s authors recommend reprioritization across a number of key sectors in order to ensure Niger’s strong economic rebound. These recommendations aim to redirect government revenues to basic social services and essential public infrastructure in order to maximize growth opportunities and social welfare. “Implementing the recommendations in the education sector will help improve spending and reallocate resources within the sector,” says Blaise Ehowe Nguem, Country Economist for Niger. “This will improve the quality of education, thereby reducing repetition and dropout rates.”
Partnership with Private Sector is Key in Closing Rwanda’s Infrastructure Gap
The COVID-19 (coronavirus) pandemic has pushed the Rwandan economy into recession in 2020 for the first time since 1994, according to the World Bank’s latest Rwanda Economic Update.
The 17th edition of the Rwanda Economic Update: The Role of the Private Sector in Closing the Infrastructure Gap, says that the economy shrank by 3.7 percent in 2020, as measures implemented to limit the spread of the coronavirus and ease pressures on health systems brought economic activity to a near standstill in many sectors. Although the economy is set to recover in 2021, the report notes the growth is projected to remain below the pre-pandemic average through 2023.
Declining economic activity has also reduced the government’s ability to collect revenue amid increased fiscal needs, worsening the fiscal situation. Public debt reached 71 percent of GDP in 2020, and is projected to peak at 84 percent of GDP in 2023. Against this backdrop, the report underlines the importance of the government’s commitment to implement a fiscal consolidation plan once the crisis abates to reduce the country’s vulnerability to external shocks and liquidity pressures.
“Narrowing fiscal space calls for a progressive shift in Rwanda’s development model away from the public sector towards a predominantly private sector driven model, while also stepping up efforts to improve the efficiency of public investment,” said Calvin Djiofack, World Bank’s Senior Economist for Rwanda.
According to the Update, private sector financing, either through public-private partnerships or pure private investment, will be essential for Rwanda to continue investing in critical infrastructure needed to achieve its development goals. The analysis underscores the need to capitalize further on Rwanda’s foreign direct investment (FDI) regulatory framework, considered one of the best in the continent, to attract and retain more FDI; to foster domestic private capital mobilization through risk sharing facilities that would absorb a percentage of the losses on loans made to private projects; and to avoid unsolicited proposals of public–private partnership (PPP) initiatives; as well as to build a robust, multisector PPP project pipeline, targeting sectors with clearly identified service needs such as transport, water and sanitation, waste management, irrigation, and housing.
While the report findings establish clearly the gains of public infrastructure development for the country as whole, it also stressed that these gains tend to benefit urban and richer households most.
“Rwanda will need to rebalance its investment strategy from prioritizing large strategic capital-intensive projects toward projects critical for broad-based social returns to boost the potential of public infrastructure to reduce inequality and poverty,” said Rolande Pryce, World Bank Country Manager for Rwanda. “Any step toward the Malabo Declaration to allocate 10 percent of future infrastructure investment to agriculture, allied activities, and rural infrastructure, will go a long way to achieving this goal.”
Greenpeace Africa responds to the cancellation of oil blocks in Salonga National Park
On Monday the UNESCO World Heritage Committee decided to remove Salonga National Park in the Democratic Republic of the Congo from the List of World Heritage in Danger. The decision follows clarification “provided by the national authorities that the oil concessions overlapping with the property are nul[l] and void and that these blocks will be excluded from future auctioning.”
Oil blocks overlapping with Salonga were awarded by President Joseph Kabila in the twilight of his regime. Greenpeace Africa has repeatedly demanded their cancellation, while local leaders voiced their opposition to the project in light of its impacts on communities.
“A decision by President Felix Tshisekedi to cancel all oil blocks in Salonga Park must be followed by a decision to cancel oil blocks in Virunga Park and across the Cuvette Centrale region. These are vast areas rich in biodiversity that provide clean water, food security and medicine to local communities and which render environmental services to humanity,” says Irene Wabiwa Betoko, International Project Leader for the Congo Basin forest.
The Salonga National Park, which is Africa’s largest tropical rainforest reserve, was inscribed on the World Heritage List in 1984. The park plays a fundamental role in climate regulation and the sequestration of carbon. The park is also home to numerous endemic endangered species such as the pygmy chimpanzee (or bonobo), the forest elephant, the African slender-snouted crocodile and the Congo peacock. Salonga had been inscribed on the List of World Heritage in Danger in 1999, due to pressures such as poaching, deforestation and poor management. The government of DRC later on issued oil drilling licences that encroached on the protected area, posing a threat to the wildlife-rich site.
“DRC’s auctioning of oil blocks has not only been scandalously lacking transparency and menacing for particularly sensitive environmental areas – they neither benefit Congolese people nor the planet. Instead of privileging a small group of beneficiaries of the toxic fossil fuels industry, diversifying the DRC’s economy should be done through renewable energy investments that will make energy accessible and affordable for all,” Irene Wabiwa concluded.
Greenpeace Africa urges full transparency from both UNESCO and the DRC government and calls for the publication of all supportive documents regarding the decision to cancel the aforementioned oil blocks, as well as the map of the nine oil blocks that are still being auctioned in the Cuvette Centrale region.
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