Jump-starting Africa’s economic recovery in a post-pandemic world

On October 14, the Brookings Africa Growth Initiative (AGI) hosted the finance ministers of Botswana and Zimbabwe and the central bank governors of Ghana and Uganda for a conversation on their priorities for economic recovery in a post-pandemic world. The discussion focused on the difficulties posed by the COVID-19 pandemic, Russia’s invasion of Ukraine, climate change, as well as the rapidly changing global macroeconomic conditions. 

The event was moderated by Aloysius Ordu, senior fellow and director of the Brookings Africa Growth initiative. The panel consisted of Ernest Kwamina Addison, governor of the Bank of Ghana, Republic of Ghana; Hon. Peggy Serame, minister of finance, Republic of Botswana; Hon. Mthuli Ncube, minister of finance and economic development, Republic of Zimbabwe; and Michael Atingi-Ego, deputy governor of the Bank of Uganda, Republic of Uganda.  

Panelists began their conversation by recounting policies and programs that have helped their respective countries to cope with the pernicious effects of the pandemic and by detailing how Russia’s invasion of Ukraine and the normalization of U.S. monetary policy have complicated economic recovery. The ensuing discussion revealed that while recent global headwinds have created common macroeconomic challenges such as surging inflation, higher portfolio outflows, and depreciation pressure—the overall impact and policy response varied by country. For example, Botswana (a highly resource-intensive country), has been able to effectively weather some of the shocks and implement a successful vaccination campaign on account of higher-than-average fiscal buffers shored up before the pandemic.    

Regarding efforts to curb inflation, all panelists referred to tightening their domestic policy interest rates. However, the conversation revealed differences in their fiscal response and support to the most vulnerable—further illustrating country-specific nuances, such as differences in macroeconomic environment and the heterogeneous effects of climate change. For example, whereas Zimbabwe recorded a bumper harvest and surplus of maize and other grains, Uganda observed a hike in food crop inflation driven by a prolonged drought.  

During the conversation, panelists also touched on the role of digital innovation in their respective countries, noting the pandemic had accelerated the need for, and interest in, digitalization. They all emphasized the enormous benefits and opportunities digitalization has provided in terms of financial inclusion, facilitating intraregional trade payments, and enhancing domestic revenue mobilization efforts. In addition, it was noted that Ghana had completed the successful pilot of a token-based central bank digital currency; the results of which showed a high uptake and wide acceptability. Panelists pointed to existing familiarity with other digital financial services such as mobile money, as a strong enabler for the success of future digital currencies and innovations. On the other hand, the panelists agreed that gaps in legal and financial infrastructure must continue to narrow in order to realize the full benefits offered by digitization. 

Panelists underscored the importance of convening often to seek consensus where possible, especially for the upcoming U.S.-Africa Leaders Summit on December 13-15, 2022.