How African economies can guard against future shocks

Ideas

How African economies can guard against future shocks

Innovative financial regulations, digital payment and ID infrastructure support and a focus on women are needed

Rodger Voorhies

In the year since Covid-19 hit, economies across Africa have experienced a dramatic slowdown. Even countries with limited initial incidence of the virus faced severe economic aftershocks. Significant disruption in agricultural markets and labour in sub-Saharan Africa has restricted income and led to rapid food insecurity for many.

Making sure emergency financial support could reach people quickly became a priority for many governments, but with lockdowns and social distancing, traditional means of distributing relief were often unavailable. Countries that had invested in making their financial systems more inclusive before the pandemic were able to mitigate the most severe economic shocks to households.

The ability of these countries to act wasn’t built on radical reinvention, but on effective use of established solutions that drive digitisation, growth and inclusion. Of course, there is a limit to how much countries can expand financial access amid a crisis, so the time to upgrade financial regulations and infrastructure to drive inclusion is now...

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