Bold Short term and Long-term Fiscal policy in Africa in the context of COVID-19
PROGRAM RATIONALE
The whole of the planet is under the devastating Covid 19 pandemic. Governments are helping their citizens to weather the shocks experienced in the form of lost lives and livelishoods. The pandemic is a major threat to the progress made so far in achieving some of the targets of the 2030 SDGs and millions of households are moving into poverty and destitution with important gender dimension. Some of huge and ongoing challenges for governments are the accumulation of debt, fiscal defcit and loss of development finance via IFF(illicit financial flows) and the large volume of non-tax revenue that go missing due to lack of internal and external problems that perpetuate existing leakages of proceeds from natural resources. There are dramatic declines in the price of primary exports from Africa and of its natural resources. The implications of the lost revenue from the slump in international commodity prices will be felt for many years to come.
There are impending problems of environmental degradation and global warming. Spatial economic realities are important and there are voices that echoes the fact that cities with their immense economic growth potential can drive the process of green economic recovery from the devastating consequences of Covid 19 and also to mitigate the future detrimental impacts of other global shocks such as climate change. We are at crossroads amid all these complex and interrelated problems that make it imperative to have a vision for a bold and radical short-term scal policy in the continent. All these topics attracted high level meetings almost everywhere in Africa in recent years before and after the Covid 19 Pandemic e.g. Cameroon (2020), Cote d’Ivoire (2019) Uganda (Feb 2020); South Africa (2019), Nairobi (2018) and London (2018, 2019, 2020)…etc.
Fiscal policy can be used to put emergency and long-term measures as part of the overall economy wide mitigation response to Covid19 and stimulate the African economy during recovery phase of the pandemic.
The content of the course heavily draws on my research over the years including the work I did with colleagues at UNECA, Addis Ababa, Ethiopia. Additional research reports and journal articles will be used to provide rigorous material to course participants. Our concern in the training should move beyond the questions of “what is the socio-economic impact of Covid 19?” to questions such as “What can be done from fiscal policy perspective now and in the future?”. The course is not a theoretical delivery on macroeconomic of fiscal policy but it is anchored on insights from relevant theories. The relevant material will be presented to participants in user friendly and non-technical manner. Therefore, for technical materials cited in the training PowerPoint slides, there is a choice for participants to make because they will be labelled as optional due to the technical nature of the work. In some instances, supplementary material (e.g. webinar recordings, blogs…etc) will be provided to reinforce understanding.
There are important ECA reports that will be useful for our training. For instance, I was a member of a core team in charge of compiling the ECA report on the socio-economic impact of Ebola which was published in 2014 (https://www.uneca.org/publications/socio-economic-impacts-ebola-africa). There are numerous lessons that we can learn from past epidemics such as Ebola and HIV/AIDs. One important policy instrument for short-term and long-term response to the pandemic is fiscal policy. Likewise, we will work together to investigate and understand the power of fiscal policy in mitigating the efects of the Covid 19 pandemic and how countries are attempting to recover their respective economies.
LEARNING OBJECTIVES
The training programme will cover critical fscal policy issues of debt sustainability, debt cancellation, debt restructuring, non-tax revenue collection, tax evasion, capital flight, and fiscal space. Note that we are still in the middle of the pandemic and the economic problems in the continent emerge from other shocks too (e.g. the locust invasion devastating Eastern Africa). Therefore, there are a number of emerging issues and existing issues evolve in a dynamic fashion following the trajectory of the pandemic and its eect on the macroeconomy. Based on existing and evolving issues, we interrogate a number of key policy issues and ongoing questions.
We have the following indicating list of issues and questions;
- Discuss the role of fiscal policy in mitigating the effects of Covid 19 and at the same time achieving key objectives of macro-stability, equity and effciency, and sustainable long-term growth in Africa.
- Review best practices of designing emergency fiscal stimulus packages to mitigate the effect of pandemics (e.g. Covid 19) that are critical to tax and expenditure policy in Africa.
- Review of the size of city economies, their revenue generating potential (both tax and non-tax revenue) and power to mitigate the impact of the pandemic;
- Use various tools, techniques and fsscal space expansion possibilities (both from internal and external sources) to assess the Africa’s fiscal stance, and debt sustainability.
- Discuss the long-term fiscal policy options available in handling other key structural problems such as Ebola, HIV Aids as well as the current pandemic and its long-term effects;