Ms Kristalina Georgieva, Managing Director, International Monetary Fund (IMF) and Ms Jutta Urpilainen, European Commissioner for International Partnerships have urged African policymakers to embrace BRAVE fiscal policies.
This is according to a joint statement issued on Tuesday in Washington D. C. at the start of the Ninth African Fiscal Forum, titled ‘Time for Brave Policies’.
According to them, the international community faces a moral and economic imperative to help all countries, especially those less privileged to fight the pandemic and build forward better.
They added that African policymakers would play a central role, as the crisis offered the opportunity to shape the recovery by embracing ‘ BRAVE’ fiscal policies.
Giving the full meaning of the acronym, they said African policymakers should be ”Bold in their objectives to build forward, a greener, smarter (more digitally connected) and fairer (with opportunities for all) world.
“Revenue-based to increase domestic resources instrumental to expand much needed fiscal space for development spending.
“Anchored in medium-term frameworks to address debt vulnerabilities and resolve them in a sustainable way, while making room for the recovery.
“Vaccine-compatible so every country can get adequate and timely access to vaccines.
“Equitable, working first and foremost, for the people and with the people, by investing in human capital and strengthening social protection systems.”
They said that ”Investing in people will make economic and social sense, as human capital determines the capacity of the region to create enough jobs, reduce informality, climb the income ladder and put poverty back on a squarely downward trend.
“For our part, we pledge to continue our partnership with sub-Saharan Africa to promote catalytic funding and the implementation of its reform agenda.”
They said that Sub-Saharan Africa (SSA) continued to grapple with an unprecedented health, social and economic crises.
They also said that the pandemic had jeopardised years of hard-won development gains and upended the lives and livelihoods of millions.
The statement quoted them as saying that “Our common goal is to continue to work closely with countries to support ongoing efforts in the fight against this pandemic, including by securing fair and equitable access to safe COVID-19 vaccines for all.
“Inadequate and delayed supply of vaccines in SSA will undermine not only regional but global efforts to end the pandemic, with significant negative health, growth and trade spill overs to the rest of the world.”
They added that fiscal policy response had been swift, with many SSA countries adopting comprehensive measures to contain the pandemic and alleviate its impact on the most vulnerable.
These efforts, they said, had been supported by rapid emergency financing, debt relief and budget support deployed by the European Commission.
They said that the IMF and other institutions had also provided policy advice and capacity development.
However, they said that financing constraints, debt vulnerabilities and limited fiscal space had prevented and continued to prevent many countries from implementing a more robust response.
“Since the start of the pandemic, IMF financial assistance to SSA countries totalled over 17.5 billion dollars.
“Team Europe has contributed 6.2 billion euros to the external response to COVID-19.
“More than one billion euros was provided through European Union budget support to create fiscal space for COVID-19 response efforts,” they said.
In spite of these concerted efforts, however, they said 2021 was likely to be another very challenging year for the region.
According to them, even if vaccines become widely available, daunting development challenges would remain.
They said “If unaddressed, extreme poverty and inequality will inevitably continue to rise and education achievements will be held back, with critical implications for social stability and security, especially in more fragile environments.”
Delegates at the two-day forum, which was taking place virtually included, African ministers of finance, policymakers and representatives from bilateral partners, multilateral institutions and civil society.