23rd February 2023
Sello Motseta
The recovery from the COVID-19 pandemic has been complicated by several headwinds such as Russia’s invasion of Ukraine and the tightening of global financial conditions.
These have created macroeconomic challenges for the African continent such as elevated inflation, higher portfolio outflows, and depreciation pressure.
“As you are aware, when the COVID-19 pandemic hit, the Government of Botswana prioritized saving lives and invested public funds into prevention of the spread of the virus and in vaccine procurement. As a direct result of these efforts, we launched a successful campaign against the pandemic. Botswana was part of only a handful of countries that achieved the WHO target of having more than 40% of its population fully vaccinated by end 2021. Today, COVID-19 has become a manageable public health issue, and our economy has bounced back strongly after the contraction in 2020,” said Beauty Manake, Assistant Minister of Trade and Industry making official remarks during the Launch of the Foresight Africa 2023 Report.
She said, “Our successful navigation of the pandemic and its economic impact was underpinned by prudent fiscal management of mineral resources and a track record of strong policies and frameworks. This has been our strength in our development over the past decades and worked for us again to enable Botswana’s economy to recover to its pre-pandemic level.”
According to officials these achievements notwithstanding, Botswana is not set apart from the current global challenges. The external headwinds such as the war in Ukraine causing food and fuel prices to soar, while the new era of high interest rates induced higher portfolio outflows and depreciation pressure. At the same time, the effects of climate change pose a significant risk and are jeopardizing food security by increasing crop failure and livestock mortality.
“Botswana recognizes the need to develop its higher value-chain industries and transition to a knowledge-based economy. As such, the government adopted (and is actively implementing) the “Reset Agenda” which prioritizes public service reforms, digitalization, and value chain development with the ultimate goal of driving the structural transformation of Botswana’s economy and achieving Vision 2036: a high-income country, with an export-led economy underpinned by diversified, and sustainable and environment friendly growth driven by high levels of productivity,” said Manake.
She said, “For Botswana to achieve this transformative growth, we will need bold and innovative policies backed by sound evidence and robust research. We need policies and actions to accelerate economic development and expand opportunity for workers, families, and communities.”
Manake believed the burgeoning relationship between BIDPA, the Africa Growth Initiative at Brookings, and the World Bank will yield high-quality, independent policy research, which will help establish long-term strategies for economic growth and better inform the Government’s programs.
She also lauded the collaboration in the coming together of African institutions to secure funding for vaccines; and the region’s rapid adoption of technological innovations to address practical problems as evidenced by the innovative digital services that boomed during the pandemic.
This is significant because African intellectuals believe African entrepreneurial talent is evident across the continent. Yet it remains largely untapped. African economies are also largely informal and operating at low levels of productivity—making it challenging to provide the requisite number of decent jobs for poverty reduction and to grow the middle class.
Although imports from Ukraine and Russia—as a share of Africa’s total imports—are small, many countries rely on these countries for critical imports including wheat and fertilizers. For example, about 30 percent of Kenya’s imported wheat comes from Russia and Ukraine, and in 2021, 44 percent of Cameroon’s fertilizer imports came from Russia.
As a result, 346 million people (a quarter of Africa’s total population) are facing severe food insecurity. However the research by BIDPA, The World Bank and the Brookings Institute show that Africa’s policymakers are not helpless. Domestic policy actions matter, more than ever.
The promise of the African Continental Free Trade Area (AfCFTA)—including accelerating structural transformation and increasing shared prosperity—is real but requires intentionality. Increasing the capacity for real-time cross border digital payments and settlements in SSA currencies is critical for the realization of this promise.
As a financial services company, present in 35 SSA countries, Ecobank has set a blueprint for future success by investing in enabling settlement of transactions in real time in many African countries, fulfilling its economic and financial integration mandate.
Continuing to unlock policy bottlenecks, including convertibility limits, will boost intra-African trade.
Technology continues to be an effective enabler of multi-sectoral growth in Sub Saharan Africa, promoting homegrown solutions, attracting investments, and enabling businesses to scale.
The sports economy worldwide is estimated at 5 percent of GDP, but only 0.5 percent in Africa. If exploited, the the Foresight Africa 2023 Report believes Africa’s sports and creative industries can offer policymakers innovative solutions. Especially, as regards job creation, and providing employment to the 15 million people entering the job market annually.
“Africa should exploit opportunities in non-traditional sectors e.g., sports and creative industries,” said Aloysius Uche Ordu, a Senior Fellow and Director of the Africa Growth Initiative in the Global Economy and Development program at the Brookings Institute.
He said, “Lesson from Ecobank, is that Africa’s banking sector is an important partner in recovery.”
Ordu encouraged policymakers on the continent to shift preferences to local brands; encourage domestic and regional competition. Diversify Africa’s food systems to include indigenous crops: sorghum, millets, teff, matoke, and cassava.”
He argued that governments must ensure local governments have financing to build smart, forward-looking cities and further prioritize climate resilient housing/buildings to secure livelihoods and reduce emissions.
African countries have also been encouraged to leverage access to ICT and issue communication credits for enhanced network connection.
