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.”
King Mohammed VI of Morocco launches Pan-African Giant Vaccine Production Plant
Morocco is getting ready to produce its own vaccines. In Benslimane, King Mohammed VI kicked off on Thursday 27th of January the construction of a giant factory to manufacture Covid-19 and other vaccines.
With 3 industrial lines and a combined production capacity that will reach 116 million units in 2024, the Cherifian Kingdom is taking a giant step towards health and vaccine sovereignty.
Ensuring the country’s self-sufficiency in vaccines and making it a leading biotechnology platform on the African continent and the world is the objective of this industrial unit, called “SENSYO Pharmatech”.
The challenge of this project, which will cost 500 million euros, is to transform the country into an essential biotechnology hub in Africa, capable of meeting the continent’s health needs in the short and long term, by integrating pharmaceutical research, clinical development, and the manufacture and marketing of essential biopharmaceutical products.
Through a massive transfer of know-how, the country will position itself, within the next 5 years, as the continent’s catalyst in research, development and production of advanced biopharmaceutical products.
Morocco is now shifting gears. From 2025, the country will be able to produce more than 2 billion doses of vaccines, with the support of one of the world leaders in biotechnology and the “Fill & Finish” industry, Swedish company Recipharm.
The project will be divided into 3 stages: The first phase involves the production launch of trial batches from 30 July 2022. The second phase, which will start in parallel with the first, will involve the transfer of the aseptic filling and active substance manufacturing of more than 20 vaccines and bio-therapeutic products, including 3 Covid-19 vaccines. Morocco thus aims to cover, by 2025, more than 70% of the Kingdom’s needs and more than 60% of those of the Continent.
The last step consists in creating, by 2030, an African biopharmaceutical and vaccine innovation cluster in Morocco, recognised worldwide, within the framework of a partnership between major international players in the fields of research and development of advanced technologies in vaccines and bio-therapeutic products and all the Moroccan supervisory institutions, in particular the Ministry of Higher Education, the Ministry of Health, the Ministry of the Interior, the Ministry of Industry and the Ministry of Finance.
This announcement follows the signing of the agreements to launch the project to manufacture and syringe the anti-Covid19 vaccine and other vaccines, which was presided over on Monday 5 July by King Mohammed VI at the Royal Palace in Fez.
For the record, Morocco is at the top of the African podium in terms of vaccination, with more than 23 million people fully vaccinated to date. This is the largest vaccination campaign in Africa. Having understood for a long time that collective immunity is the only way out of the health crisis, the country launched a fierce battle around the vaccine very early on, by actively participating in the clinical trials.
Bringing dry land in the Sahel back to life
Millions of hectares of farmland are lost to the desert each year in Africa’s Sahel region, but the UN Food and Agriculture Organization (FAO) is showing that traditional knowledge, combined with the latest technology, can turn arid ground back into fertile soil.
Those trying to grow crops in the Sahel region are often faced with poor soil, erratic rainfail and long periods of drought. However, the introduction of a state-of-the art heavy digger, the Delfino plough, is proving to be, literally, a breakthrough.
As part of its Action Against Desertification (AAD) programme, the FAO has brought the Delfino to four countries in the Sahel region – Burkina Faso, Niger, Nigeria and Senegal – to cut through impacted, bone-dry soil to a depth of more than half a metre.
The Delfino plough is extremely efficient: one hundred farmers digging irrigation ditches by hand can cover a hectare a day, but when the Delfino is hooked to a tractor, it can cover 15 to 20 hectares in a day.
Once an area is ploughed, the seeds of woody and herbaceous native species are then sown directly, and inoculated seedlings planted. These species are very resilient and work well in degraded land, providing vegetation cover and improving the productivity of previously barren lands.
In Burkina Faso and Niger, the target number of hectares for immediate restoration has already been met and extended thanks to the Delfino plough. In Nigeria and Senegal, it is working to scale up the restoration of degraded land.
Farming seen through a half-moon lens
This technology, whilst impressive, is proving to be successful because it is being used in tandem with traditional farming techniques.
“In the end the Delfino is just a plough. A very good and suitable plough, but a plough all the same,” says Moctar Sacande, Coordinator of FAO’s Action Against Desertification programme. “It is when we use it appropriately and in consultation and cooperation that we see such progress.”
The half-moon is a traditional Sahel planting method which creates contours to stop rainwater runoff, improving water infiltration and keeping the soil moist for longer. This creates favourable micro-climate conditions allowing seeds and seedlings to flourish.
The Delfino creates large half-moon catchments ready for planting seeds and seedlings, boosting rainwater harvesting tenfold and making soil more permeable for planting than the traditional – and backbreaking – method of digging by hand.
“The whole community is involved and has benefitted from fodder crops such as hay as high as their knees within just two years”, says Mr. Sacande. “They can feed their livestock and sell the surplus, and move on to gathering products such as edible fruits, natural oils for soaps, wild honey and plants for traditional medicine”.
Women taking the lead
According to Nora Berrahmouni, who was FAO’s Senior Forestry Officer for the African Regional Office when the Delfino was deployed, the plough will also reduce the burden on women.
“The season for the very hard work of hand-digging the half-moon irrigation dams comes when the men of the community have had to move with the animals. So, the work falls on the women,” says Ms. Berrahmouni.
Because the Delfino plough significantly speeds up the ploughing process and reduces the physical labour needed, it gives women extra time to manage their multitude of other tasks.
The project also aims to boost women’s participation in local land restoration on a bigger scale, offering them leadership roles through the village committees that plan the work of restoring land. Under the AAD programme, each site selected for restoration is encouraged to set up a village committee to manage the resources, so as to take ownership right from the beginning.
“Many women are running the local village committees which organise these activities and they are telling us they feel more empowered and respected,” offers Mr. Sacande.
Respecting local knowledge and traditional skills is another key to success. Communities have long understood that half-moon dams are the best way of harvesting rainwater for the long dry season. The mighty Delfino is just making the job more efficient and less physically demanding.
Millions of hectares lost to the desert, forests under threat
And it is urgent that progress is made. Land loss is a driver of many other problems such as hunger, poverty, unemployment, forced migration, conflict and an increased risk of extreme weather events related to climate change.
In Burkina Faso, for example, a third of the landscape is degraded. This means that over nine million hectares of land, once used for agriculture, is no longer viable for farming.
It is projected that degradation will continue to expand at 360 000 hectares per year. If the situation is not reversed, forests are at risk of being cleared to make way for productive agricultural land.
Africa is currently losing four million hectares of forest every year for this reason, yet has more than 700 million hectares of degraded land viable for restoration. By bringing degraded land back to life, farmers do not have to clear additional forest land to turn into cropland for Africa’s rising population and growing food demands.
When Mr. Sacande talks about restoring land in Africa, the passion in his voice is evident. “Restoring degraded land back to productive good health is a huge opportunity for Africa. It brings big social and economic benefits to rural farming communities,” he says. “It’s a bulwark against climate change and it brings technology to enhance traditional knowledge.”
A version of this story first appeared on the FAO website.
South Africa’s Covid-19 Response Gets a $750 Million Boost
The World Bank Group Board of Executive Directors today approved South Africa’s request for a $750 million development policy loan (DPL). This loan will support the Government of South Africa’s efforts to accelerate its COVID-19 response aimed at protecting the poor and vulnerable from the adverse socio-economic impacts of the pandemic and supporting a resilient and sustainable economic recovery.
The DPL supports the implementation of South Africa’s Economic Reconstruction and Recovery Plan (ERRP) and is well aligned with the World Bank’s Crisis Response Approach aimed at protecting lives, livelihoods and supporting a more inclusive and resilient growth path. It reflects priorities to modernize the country’s social protection and health services and to improve delivery systems which will apply even beyond the pandemic. It also enhances financial sector stability, specifically the establishment of a deposit insurance scheme. It further supports South Africa’s commitment to climate change.
“The World Bank budget support is coming at a critical time for us and will contribute towards addressing the financing gap stemming from additional spending in response to the COVID-19 crisis,” says Dondo Mogajane, Director General of National Treasury of South Africa. “It will assist in addressing the immediate challenge of financing critical health and social safety net programs whilst also continuing to develop our economic reform agenda to build back better.”
The funding is a low interest loan that contributes to the government’s fiscal relief package while reinforcing South Africa’s decisions on how best to provide relief to the economy and those worst affected by the current crisis. The loan complements support by the International Monetary Fund, the African Development Bank, and the New Development Bank as part of the Government of South Africa’s broader financing strategy to access external financing from international financial institutions.
“With this DPL, we have partnered with the government to provide much needed relief from the impacts of the most serious economic crisis South Africa has experienced in the past 90 years, while tackling long-standing challenges to growth and development. This support aims to put the country on a more resilient and inclusive growth path by leveraging South Africa’s strength to mitigate the effects of the COVID-19 crisis through their strong social safety net and by advancing critical economic reforms,” says Marie Françoise Marie Nelly, World Bank Country Director for South Africa. “This financing builds on our new World Bank Group Country Partnership Framework (CPF) 2022 – 2026, jointly developed with the government in July 2021, to help stimulate investment and job creation.”
As the second largest economy in Africa, South Africa’s economic performance has spillover effects on other countries in the region. Its recovery and successful economic development will provide an economic boost to the whole region.
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