BUSINESS REPORTER
Africa does not need a Marshall Plan to ride out the ongoing coronavirus
crisis but can turn to the African Continental Free Trade Area (AfCFTA)
to accelerate regional and economic integration, a top official at the Economic Commission for Africa (ECA) has said.
The Marshall Plan was an American initiative passed in 1948 for foreign
aid to Western Europe after the devastation of World War II.
It provided more than US$15bn to help finance the rebuilding efforts of the continent. Africa is buffeted by Covid-19 with growth estimated at -3.4% in the worst-case scenario for 2020, according to the African Development Bank.
Growth will rebound to 3% in 2021, the bank said.
In a virtual panel discussion to mark Africa’s inaugural Integration
Day on Tuesday, ECA executive secretary Vera Songwe said integration is
key for Africa’s growth and attainment of Agenda 2030 for sustainable development.
“We need to talk about Africa and AfCFTA. Our Marshall Plan is the AfCFTA. The AfCFTA is our plan so let us take it and run with it,” she said,
adding the continent had collectively penned its own blueprint for growth
with the single market.
“The Marshall Plan for Europe was about 160% of their GDP traded to
bring back growth after the war.
What happened to us is that we were all waiting for a health crisis but we got an economic crisis first which was very steep, very deep, not just for us but for the rest of the world.”
ECA estimates that economic growth in Africa in 2020 will drop
from 3.2% to -2.8% to about zero percent growth as a result of COVID-19, a situation Songwe described as disastrous, throwing an extra 20m
people into poverty in a continent where almost 300m cannot afford one
meal a day.
“Covid-19 came and has taken us quite far behind because we need to
reassess where is it that we want to go and how we want to go. We definitely need to do things differently,” she said.
Songwe said it was crucial for Africa to integrate its financial systems to
create a mutualised system of financial stability that works for the continent or regional monetary cooperation as in East Asia.
“The Afreximbank Exchange Facility is an excellent step in the right
direction. But more is needed to integrate our economies and financial
sectors,” she said, adding that “when there is a crisis we come together and
we pull and mutualise our resources so that those who are the most hit get
some resources”.
“So we do not need to go the long distance of common currency to get a
mutualised system of financial stability that works for the continent.
We need to ensure that as we build the AfCFTA and trade integration, we begin to build stronger, much more robust monetary and fiscal systems that can ensure that as a continent we actually can work with each other in a more effective way.”
