BIZweek n°299 17 jui 2020
BIZweek n°299 17 jui 2020
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  • Parution : n°299 de 17 jui 2020

  • Périodicité : hebdomadaire

  • Editeur : Capital Publications Ltd

  • Format : (260 x 370) mm

  • Nombre de pages : 8

  • Taille du fichier PDF : 3,8 Mo

  • Dans ce numéro : SADC réponse régional à la pandémie covid-19.

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VENDREDI 17 JUILLET 2020 BIZWEEK ÉDITION 299 LA TOUR SADC REGIONAL RESPONSE TO COVID-19 PANDEMIC 13 Member States to record economic contractions in 2020, including Mauritius as ‘worst affected’The Bulletin 8 of the SADC Response to COVID-19 covers a number of key aspects on the COVID-19 pandemic. It provides key recommendation on health, economic and financial sectors and natural resources and conservation sector to its Member States, namely Angola, Botswana, Union of Comoros, the Democratic Republic of Congo, Eswatini, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, United Republic of Tanzania, Zambia and Zimbabwe The Southern African Development Community (SADC) region continues to experience an increase in cases in a number of Member States, according to Bulletin 8 of the SADC Response to COVID-19 released on the 9th of July. As the pandemic unfolds and the adverse effects of the restrictive measures filter through the economy, there is a global consensus that the economic downturn for 2020 will be worse off than forecasted earlier in the year. The COVID-19 pandemic has had a more negative impact on economic activity in the first half of 2020 than anticipated, and the recovery is projected to be more gradual than previously anticipated. According to the International Monetary Fund’s World Economic Outlook Update for June 2020, the global economy is projected to contract by 4.9 per cent in 2020, 1.9 percentage points worse than the April, 2020 World Economic Outlook (WEO) forecast. In 2021 the global economy is projected to recover with an estimated growth of 5.4 per cent. Overall, this would leave 2021 GDP some 6.5 percentage points lower than in the pre-COVID-19 projections of January 2020. As the economic fallout from the COVID-19 pandemic and the lockdowns have become more severe, many governments have steppedup their emergency lifelines to protect people, preserve jobs, and prevent bankruptcies. The steep contraction in economic activity and fiscal revenues, along with the sizable fiscal support, has further stretched public finances, with global public debt projected to reach more than 100 per cent of GDP this year. For Sub-Saharan Africa (SSA) and SADC regions, the contraction in 2020 is now expected to be stronger than envisaged in April 2020 reflecting a weaker external environment and measures to contain the COVID-19 outbreak. The external environment less favorable associated with weak global economic growth has resulted in the collapse of global travel, and tourism flows, have grounded to a halt, remittances are expected to fall by about 20 per cent ; and the external financing conditions remain tight despite some easing in recent weeks, and commodity prices remain weak. The SSA regional economy is projected to contract by 3.2 per cent in 2020, which is 1.6 percentage points deeper than projected in April. Tourism-dependent economies, oil-exporting countries, and other commodity exporters have seen larger downward revisions. Growth in SSA is projected to recover only gradually assuming that the pandemic abates and lockdowns ease in the second half of 2020. In 2021, regional growth is projected at 3.4 per cent in 2021, which is 0.6 percentage points below the April 2020 projection. The SADC region is also expected to recover with a projected average growth of 3.9 per cent in 2021. Three Member States, Malawi, Mozambique and Tanzania are forecasted to record economic growth of 1 per cent, 1.3 per cent and 1.9 per cent in 2020. On the other hand, given the pandemic and adverse climatic events that affected the SADC region, 13 Member States are projected to record economic contractions in 2020 with the following worst affected  : Seychelles (13.8 per cent) ; Mauritius (12.2 per cent) ; Zimbabwe (10.4 per cent) ; Botswana (9.6 per cent) ; South Africa (7.2 per cent) ; Comoros (6 per cent) ; Namibia (6 per cent) ; Zambia (5.1 per cent) ; Lesotho (4.5 per cent) ; and Angola (4 per cent). The pandemic has derailed the SADC macroeconomic convergence (MEC) programme with no Member State expected to achievethe economic growth target of 7 per cent in 2020. In 2021, only Mauritius (8.9 per cent) and Botswana (8.6 per cent) are anticipated to achievethe target, with 4 Member States estimated to post growth rates exceeding 4 per cent. The economic outlook of a recovery in 2021 is largely premised on the continued gradual easing of restrictions that has started in recent weeks and, importantly, if the region avoids the same epidemic dynamics that have played out elsewhere in regions such as Europe, North and South America. As the lockdowns are eased, policy focus needs to shift towards facilitating recovery, although uncertainty about the containment of the pandemic remains, and elevated debt could constrain the scope and effectiveness of further fiscal support. Policies to adopt going forward Member States are urged to consider the following in their policies going forward. (a) As the economies start to recover, policy focus should shift from broad fiscal support to more affordable, targeted policies. These policies should be targeted to the poorest households and sectors most hit by the health crisis. The high levels of informality present a serious challenge for providing economy-wide policy support and the ability to do so will become increasingly difficult, should financing conditions deteriorate further as more resources will be diverted to public health to cater for the expected increase in infections. (b) Monetary policies should remain accommodative in Member States where inflation pressures are low to maintain financial sector stability. Where possible, monetary authorities should continue to provide liquidity to banking and financial institutions and ensure timely processing of all payment transactions and settlements, deposit withdrawals and remittance transfers. Banks should be allowed to use capital buffers and flexibility provided by the macroprudential frameworks to accommodate COVID-related shocks and restructure their loan portfolios. For the Member States with floating exchange rate regimes, exchange rate flexibility can help cushion the external shocks, while some drawdown of reserves to smooth disorderly adjustment may mitigate potential financial implications from foreign exchange mismatches but it may result in more Member States remaining with reserves below the SADC macroeconomic convergence (MEC) target threshold of import cover of more than 6 months. (c) As the crisis wanes, Member States should implement structural reforms to put their fiscal positions on a path consistent with debt sustainability. However, care must be taken when withdrawing emergency fiscal measures to ensure that their removal does not jeopardize economic recovery. As authorities usher in the « new economic order », reforms to raise revenue, rationalize spending, including subsidies, should help create space for public investment in education and essential infrastructure that include digitalization that promotes sustainable and inclusive growth. Cont’d on page 5 4
VENDREDI 17 JUILLET 2020 BIZWEEK ÉDITION 299 11w 911)C Ménnhpr Statesas in 1 JI.J I y 720:1() Country Confir medCases LA TOUR Total Num ber of death Recove r i es Active Cases Cases per lmillion population Angola 291 :.5. 97 179 9 Botswana 221 1 28 17 97 Comoros 393 7 290 95 349 DRC 1189 176 2317 4696 80 Eswati ni 840 11 41g 411 124 Lesotho 35 0 11 24 15 Madagascar 2303 22 1CIP05 1275 83 Malawi 1265 16 2 989 55 Mauritius 341 10 326 5 268 Mozambique 903 6 24g 649 29 Narnibia 285 0 24 261 112 Seychelles 81 0 11 70 824 South Africa 159333 2749 76925 80559 2585 Tanza nia 509 21 1S3 305 9 Zarnhi a 1532.30 134S 254 89 Zi m ha biuve 6.05 7 155 432 41 TOTAL SADC 175142.3071 32668 90222 Source SADO Member States Data Negative Impacts on Forest and Wildlife Conservation Tourism contributes significantly to the economies of the SADC region. Revenue streams to Governments and communities are drastically reduced due to collapse in nature-based tourism both consumptive (e.g. hunting and associated industries) and nonconsumptive (game viewing, photographic safaris etc.). At the same time, most Member States financial resources are under extreme stress due to the need to protect people from COVID-19 including treating those that would get affected and other COVID-19 response measures. This implies that the forestry and wildlife sectors are likely to experience reduced funding from Governments. This situation negatively impacts conservation and anti-poaching operations and can further fuel poaching, deforestation, illicit trade and allow wildlife criminals to exploit enforcement vulnerabilities caused by the crisis. There are strong indications that some species of wild animals are the source of the COVID-19 while others are acting as sources, reservoirs or vectors of transmission of deadly viruses for future pandemics. This has put the spotlight on wildlife trade and its potential role in the spread of human disease and led to numerous calls for widespread bans on the trade in and consumption of wildlife. Efforts to ensure legal and sustainable trade in wild species can be undermined by poorly considered and/or simplistic responses to the crisis, leading to significant loss of food security and livelihoods to many communities and damage to national economies in the continent that is already under pressure from global recession. This is a challenge to the region as most SADC Member States subscribe to principle of sustainable use, which includes legal wildlife trade, in an effort to ensure that conservation contributes to socioeconomic development. Reduced ranger activity in both forestry and wildlife sectors would, among others, result into increased Human Wildlife Conflict. As such communities might suffer much more from problematic wild animals which are not well managed due to low levels of activity in this area. Subdued ranger patrol and monitoring will motivate illegal activity targeting vulnerable iconic species already facing extinction. Tourists provide some additional eyes when it comes to pickingup illegal harvesting of forest products and poaching incidents as they transverse the forests and wildlife conservation areas. As such poachers tend to be more careful and this contributes to reduced poaching and illegal harvesting of forest and wildlife products. In this period of reduced activity in tourism, it is expected that there will be increased poaching and illegal wildlife activities which will erode the hard worn gains on conservation in some Member States. Despite the negative impacts of COVID-19 on Forest and Wildlife Conservation, there are some positive impacts. Travel restrictions on land, sea and air make it difficult for traffickers and poachers of contraband to operate. The closing of borders has also come with enhanced border patrols by law enforcement agents including the military in most Member States. The anticipated impact of this is reduced demand for illegally traded forest products and wildlife specimen. It is generally expected that trafficking of wildlife contraband willalso drastically get reduced. Conservation agencies require budgetary support from different sources so that they are able to sustain anti-poaching and anti-trafficking operations. Additionally, staff and rangers in particular require PPE over and above the equipment that is required for effective law enforcement operations. SADC Member States are also advised to consider providing minimum support to conservation during the fight against COVID-19 in order to safe guard the ecosystem and services they provide beyond the pandemic. With a slump in tourism, the communities who derive direct benefits (dividends, services provision, employment etc.) from ecotourism are badly impacted, support is therefore required to enable them to subsidize basic necessities such as food relief, food for work programmes, etc to break the likely poverty cycle associated with loss of employment and low economic activities in this sector. These interventions can be implemented by partnering with NGOs, Private sector and Civil society organizations already working in this field as the need for support is urgent. 5

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