By Chinagorom Ugwu
Nigeria’s former minister of finance and member of South African Presidential Economic Advisory Council, Ngozi Okonjo-Iweala has said Africa should learn from China and develop her manufacturing capability noting that it is one of the “lessons” the continent has to learn following the outbreak of corona virus across the globe.
Okonjo-Iweala who stated this during the African Independent Television program, Moneyline, on Thursday explained that the cost of purchase and importation of pharmaceuticals into the continent to fight COVID-19 with the closure of borders is enormous.
“There is something to learn from the way that china has done things in terms of its economy. Of course, I am totally in support of the idea that we should develop more of our own manufacturing capability on the (African) continent. I think this is one of the lessons we have to learn. Look at pharmaceuticals, if we are importing so much when all borders are closed, how do you get those medications? So, I am in support of us trying to look at some of our industries…and how we can establish a stronger manufacturing capability in pharmaceuticals on the (African) continent. So, this pandemic should make us stand back and look at some of the things that need to be changed in our economy, in our health system, in our approach to helping our poor people and making sure that people have jobs. Everything has to be re-examined” Okonjo-Iweala said.
According to the development economist, to develop and improve the manufacturing capability, Africa needs to make themselves attractive to domestic investors and business people.
The erstwhile finance minister who lamented that many African countries are battling with unsustainable debt burden further called on the African leaders to mobilize external and domestic resources to combat corona virus pandemic in the continent adding that the continent also needs fiscal policies and actions to fight the pandemic which, according to her, fiscal stimulus is part of.
She regretted that African countries had not given enough fiscal stimulus in the economy noting that, on the average, the continent issues fiscal stimulus of 0.8% of GDP which She said is one-third of what other continents have been giving even as She disclosed that African Union is pressing for developed countries to support the continent with loans and grants with low interest rates.
The former world bank managing director of operations advised African leaders to do all they can to save businesses in Africa and insisted that the fiscal stimulus should be not be wasted, but invested in small and medium enterprises by giving soft loans and grants adding that the donations made by Nigerian business people and in Africa generally should be used to equip the country and continent to save lives.
In her words, “ …to be able to tackle this problem (borrowing latitude), I think we need two things. First, we need our own domestic resources and …Central bank all over the continent including in Nigeria have been active, but that is not enough. We also need fiscal policies and actions and part of it is the fiscal stimulus. We have seen what has happened in developed countries. They have issued fiscal stimulus in their economies equivalent to 10% of their GDP. In the U.S, (it is) two trillion dollars. Japan actually went even further and it is talking of fiscal stimulus (of) 20% of GDP. This is because they want to make sure that the effect of this is mitigated on people and on businesses. So, this fiscal stimulus is designed to help make sure that businesses can keep going especially small and medium enterprises. Look at Africa, we have at the average, the amount of fiscal stimulus that African countries have been able to do, on average is 0.8% of their GDP, one-third of what other countries outside have been able to do. This is absolutely not enough for us to solve this problem”.
Asked to state her hope as Africa battles COVID-19, Okonjo-Iweala revealed that young people in Africa give her hope noting that they have demonstrated their creativity and vibrancy by responding quickly with the production of face-masks and sanitizers as well as other inventions in technological and agricultural spaces.