The European Business Council for Africa

In one year, the pandemic has halted a quarter-century of steady economic growth in Africa, disrupted value chains, and caused an unprecedented increase in inequality and poverty. As a result, the entire world is at risk, because the global economy could lose one of its future drivers of growth.

The COVID-19 pandemic has taught us that we can no longer treat seemingly faraway crises as distant problems. What happens anywhere can affect people everywhere. That is why addressing the impact and legacy of the pandemic in Africa is so important.

Although Africa has suffered fewer COVID-19 cases and deaths than other areas of the world, the pandemic’s impact on the continent could be more sustained, deep-rooted, and destabilizing for the entire planet. In one year, the pandemic has halted a quarter-century of steady economic growth, disrupted value chains, and caused an unprecedented increase in inequality and poverty.

Entrepreneurs and businesses most impacted by economic, health and social challenges triggered by COVID-19 will be able to benefit from a new EUR 100 million private sector financing initiative backed by (OeEB), the Development Bank of Austria, and the European Investment Bank.

The programme will enhance access to long-term financing across sub-Saharan Africa, help to create thousands of jobs and accelerate sustainable development and poverty reduction. The first joint business financing supported by the two institutions will provide both direct loans to companies in Africa and financing managed by local banks.

“This first cooperation between the Development Bank of Austria and the European Investment Bank will provide timely support for private sector investment across Africa and strengthen sustainable development during challenging times. The project is an example of how European and national institutions can work together efficiently to achieve development goals in Africa, to address the consequences of the pandemic and to create thousands of jobs. Economic development in the African continent also helps Austrian exports in the long term.” said Gernot Blümel, Federal Minister of Finance of the Republic of Austria and Governor of the European Investment Bank.

The Council today approved conclusions affirming the EU's commitment to give new impetus to its partnership with the Horn of Africa, and establishing a new strategy for the region.

geo-strategic priority for the EU in Africa, the Horn of Africa region has undergone unprecedented developments over the last years and is now at a crossroads.

With this new strategy, EU’s intention is to further strengthen and deepen its strategic relationship and partnership with the Horn of Africa and its countries, notably with a view to reduce instability, promote democracy and sustainable growth.

Context

On 15 February 2021, the World Health Organization listed the AstraZeneca/Oxford COVID-19 vaccine for both emergency use and distribution via the COVAX facility. The African Regulatory Taskforce subsequently endorsed the WHO emergency use listing for this vaccine and the first shipments to Africa were initiated from the COVAX facility, with Ghana receiving the first consignment.
On 10 March 2021, the European Medicines Agency announced that four European countries suspended the use of the AstraZeneca COVID-19 vaccine (batch no. ABV5300) following reports of blood clots and bleeding disorders from Austria.
Similar events were reported by additional European members states during this time and by 15 March 2021, six countries suspended the use of the AstraZeneca vaccine (batch no. ABV5300), 11 countries paused their AstraZeneca vaccination campaigns entirely regardless of batch, while three countries indicated that they will continue use of the vaccine.

The European Union has approved additional funds for a project supporting the African nation’s quest to diversify exports and reduce its dependency on oil for economic growth.

UNCTAD’s work in Angola has received a €780,000 (about $950,000) boost from the European Union.

The money, provided through the EU-funded Train For Trade II programme for Angola, will strengthen the organization’s work to help the country build the productive capacities necessary to diversify its economy.

Oil accounted for about 33% of the African nations’ GDP and 93% of its exports in 2019.

“Productive capacities are the engine of sustainable economic growth and the key to transforming Angola’s economy,” said Paul Akiwumi, UNCTAD’s director for Africa and least developed countries.

In February 2020, the first case of COVID-19 was reported in sub-Saharan Africa. Simultaneously with the spread of the disease, African countries were being affected by disruptions of global supply chains of critical goods, such as food and medical supplies. The pandemic resulted in a sharp contraction of trade worldwide, with severe knock-on effects in sub-Saharan Africa on economic growth, poverty and food insecurity.

A recent study projects that COVID-19 will result in persistent shifts in African trade patterns by 2030. African countries are expected to trade more with China and less with Europe, the United States (US) and India.

The study was conducted by an international research consortium comprising the Frederick S. Pardee Center for International Futures, Institute for Security Studies (ISS), and Gordon Institute of Business Science (GIBS). It uses scenarios to quantify the effect of COVID-19 on bilateral trade patterns for 10 African countries – Angola, Cabo Verde, Chad, the Democratic Republic of the Congo, Ethiopia, Kenya, Mali, Mauritius, Nigeria and South Africa.

Agence Francaise De Developpement (AFD) is investing €2 billion in Nigeria.

The French Development Agency (AFD) is a development finance institution 100 per cent held by French government.

In Nigeria, it is mainly into financing of infrastructure projects (water, energy, transport and agriculture).

It also involves in financing related to banking sector, governance and the cultural and creative industries.

Speaking to THISDAY, the AFD Country Director Nigeria, Pascal Grangereau, said €2 billion was set aside to be sent on mainly road financing, water sector, improvement in electricity and agriculture.

He said €300 million was being spent on the Abuja Electricity Backup, a project in collaboration with Transmission Company of Nigeria (TCN) to improve electricity at the nation’s capital.

Grangereau said a total of €200 million is equally expended on the North West Electricity Backup.

On agriculture, he said vocational training is currently held across the nation to improve the skills of Nigerians.

On Wednesday, January 27, 2021, CCA hosted an exclusive high-level dialogue with H.E Uhuru Kenyatta, President of the Republic of Kenya, and Sundar Pichai, CEO of Google and Alphabet, focused on how digital technologies and partnerships can unlock new pathways for economic growth in Africa. The dialogue was moderated by award-winning journalist, Zain Verjee, Founder & CEO of Zain Verjee Group.

CCA President and CEO, Florizelle Liser kicked off the dialogue, expressing that CCA was pleased to facilitate the conversation and connect the Silicon and Savannah Valleys. Ms. Liser noted the significance of U.S.-Africa partnership, stating, “If COVID-19 has taught us anything, it is that we are better off working together, and our ability to collaborate is critical for post-pandemic economic recovery both here in the United States and in Africa.”

During the discussion, H.E. President Kenyatta underlined the notable impact of technology as a driver of growth in Kenya over the past 20 years. “Today as we speak, as a result of digitization, technology, internet penetration, almost 95% of all Kenyans have access to financial services as opposed to less than 20 years ago when only 25% of the population had a bank account.”

The Netherlands Ministry for Trade and Development Cooperation is extending a €6 million grant to the African Legal Support Facility (ALSF), to support the ALSF’s work providing legal and technical services to low-income countries to give them more clout in commercial dealings.

The funding will be disbursed over a three-year period. ALSF Director Stephen Karangizi thanked the Netherlands, a shareholder of the African Development Bank, for its strong support over the years. “The assistance will help the ALSF to better respond to the impacts of COVID-19 and help countries to recover much faster to enhance sustainable, inclusive development in Africa,” he said.

Since 2013, the Netherlands has cumulatively provided €15.5 million to the ALSF to ensure that African countries achieve maximum economic value for their resources.

The funds provided by the Netherlands enabled the ALSF to successfully assist many African governments to strengthen their legal expertise and negotiating capacities, particularly in the areas of natural resources and extractives.

The governments of Norway and the United Kingdom have extended grants of around £2.6 million to the African Legal Support Facility (ALSF) to support its activities over the next two years.

The Norwegian government, through its Agency for Development Cooperation, provided 20 million Norwegian kroner (around £1.6 million) to support the 2021 and 2022 work programs of the ALSF.

The Foreign, Commonwealth & Development Office of the United Kingdom is providing a £1 million grant to the ALSF, which will go to supporting debt management capacity in low-income African countries. The funding forms part of a cooperation agreement signed by the two parties.

The UK grant is in line with the G20 Debt Service Suspension Initiative, supported by the IMF and the World Bank, and comes as African countries continue to implement urgent measures to manage the spread of the COVID-19 pandemic and its socio-economic impacts, including the strain on their debt portfolios.