The African public authorities are called to react swiftly and efficiently to implement urgent reforms to improve the business climate and establish an environment conducive to investment in line with the requirements for the creation of innovative companies, Marouane Abassi, Governor of the Central Bank of Tunisia said Thursday.
In remarks on behalf of President of the Republic, Kais Saied, at the opening of the international conference “FINANCING INVESTMENT & TRADE IN AFRICA” FITA 2021 held on June 25 and 26 in Tunis, he said the COVID-19 health crisis and its negative impact on the global economy in 2020 has shown the limits of globalization, which despite its many contributions to the global economy, has revealed major deficiencies, including the disruption of supply chains.
This pandemic has therefore highlighted the vital importance of proximity, hence the urgent need for Africans to focus on strengthening regional and sub-regional cooperation, he said.
In the same context, he pointed to the weakness of pan-African cooperation in trade (14.4% in 2019), adding that trade in goods on the continent hardly exceeds 2.5% of world trade, in addition to the deterioration of the debt ratio, which is about 70% of GDP.
For Tunisia, trade with the Continent (excluding Arab countries) continues to represent minimal shares in global foreign trade, or 2% of exports and only 0.5% of imports.
Marouane Abassi said that major challenges are faced by African countries to revive the pace of economic activity as soon as possible, control the debt and especially overcome the growing difficulties that hinder access to international financial markets, in addition to ensuring stable financing and affordable conditions.
“In this regard, the IMF estimates that $285 billion in additional financing is needed for African countries over the period 2021-2025, almost half of which should be targeted at low-income countries,” he said.
He added: “Nevertheless, and with the prospects of recovery of the global economy in 2021, (growth of 5.6% and increase in world trade in goods of 8%), vast opportunities are available to African economies that must be exploited wisely.
“To this end, bilateral and multilateral cooperation is an ideal springboard for the revival of investment and growth in our countries, and there, the private sector, by its dynamism and responsiveness, is the spearhead of this recovery, as well as non-governmental initiatives, of which the Tunisia-Africa Business Council (TABC) is an edifying example, “according to Abassi.
Decisive contribution of financial system
In Tunisia, in the face of the pandemic, and in support of the lockdown measures taken by the public authorities, the contribution of the financial system has been decisive in the management of the crisis through the implementation of mechanisms and non-conventional actions to ease the financial burdens of businesses and households, and to bail out market operators, including the State.
“This role must be further consolidated throughout the Continent, to effectively support the recovery of economic activity, by strengthening the capacity of the system, improving digital financial services, for the benefit of companies both those acting in conventional areas and start-ups and Fintech, “he said.
He noted that the BCT is working with its peers and partners on the Continent to strengthen cooperation in the areas of financing, integration and modernization of African payment systems, but also on the development of the statutes of the African Monetary Institute that should eventually lead to the creation of an African Central Bank.
“That said, the combined efforts of the various stakeholders in a bid to bring together the conditions for the revival of economic growth, employment and inclusive and sustainable development, cannot achieve the desired objectives without the implementation of common structural policies. The latter require the conjunction of efforts bilaterally and multilaterally and fit into the promotion of the digital economy and sustainable development (green economy), within the framework of a comprehensive policy of post-COVID recovery,” he said.
Abassi said the top priority in the immediate future is to defeat the pandemic, which inevitably requires a large-scale vaccination of the population. In addition, it is necessary to select priority projects, mobilize international support to back the vast recovery plans of African countries, implement the digital transformation in Africa, increase investments in sectors aimed at financial inclusion, namely, fintech and e-commerce, reduce the energy deficit through the development of traditional and renewable energy sectors and strengthen air, land and sea links.