Africa and Covid-19: The Grandeur and Misery of the “Declarations”

Providing care and feeding ourselves: the Covid-19 pandemic has brought these two vital functions back to the forefront and reinforced our expectations regarding the protective role of the State. Challenged, the State reacts: through words as much as through actions, it seeks to convince the population of its ability to manage the emergency, mobilize energies, and chart a way out of the crisis. This scenario is universal, but it takes on a particular tone in Africa, where governments, with the support of international organizations, have for decades been issuing numerous far-reaching declarations and commitments intended to bring about a better future.

Malabo on agriculture

In the "Malabo Declaration on Accelerated Agricultural Growth and Transformation in Africa for Shared Prosperity and Better Livelihoods", adopted in June 2014 in Equatorial Guinea, the Heads of State and Government of the African Union made seven specific commitments, by 2025, with the aim of reducing poverty and hunger.[1]. Yet, to say the least, progress is slow. According to the latest assessment report, released in February, only four countries – Ghana, Mali, Morocco, and Rwanda – out of the 49 that responded to the survey, achieved the required score to be considered "on track" to achieve these goals. This is the result, which emerges from a battery of indicators on agricultural production growth, investment in agriculture, the share of regional trade, and many other criteria.[2].

The most emblematic commitment – to dedicate at least 10 billion of the state budget to agriculture – is only respected by four countries: Burkina Faso, Burundi, Mali, and Rwanda. The share of public spending dedicated to this sector on the continent is on average 3 billion, even though it employs more than half of the working population.

Abuja on health

It is curious that in the current health disaster, the Abuja Declaration is rarely cited. Perhaps because, here again, the promise is far from being kept.

In April 1981, at a summit in Nigeria's federal capital, African governments committed to allocating at least 15 billion of their annual budgets for "improving the health sector" to combat "HIV/AIDS, tuberculosis and other related infectious diseases." A third of a century later, in 2015, only Madagascar and Sudan, out of the 52 countries that provided statistics, reached this threshold of 15 billion. As for the recommendations of a WHO high-level commission, setting a minimum amount of $86.3 per capita for public health expenditure and 5 billion of gross domestic product (GDP), they have only been implemented in 11 countries for the first indicator, and 2 countries for the second.[3].

It would of course be reductive to limit ourselves to the indicators defined by the Malabo and Abuja Declarations to assess the effectiveness of policies implemented in agriculture and health: by erasing any qualitative aspect, they mask the undeniable progress made in these areas. Similarly, we should examine, beyond average data, the results obtained according to age, sex, professional activity or income level of the different categories of the population. We limit ourselves here to noting the failure of the strategies implemented in relation to the indicators set by the strategists themselves.

Why this failure? The answers are multiple, but one factor stands out: the burden of debt. The explanation is partial, as the public debt of sub-Saharan African countries fell sharply during the 2000s. But it then started to rise again, going from 33 billion pounds in the period 2010-16 to 56 billion pounds forecast in 2020. As a result, the amount of interest paid, as a proportion of tax revenue, has practically doubled since 2010 (graph). Thus, African countries spend much more to repay their creditors than to strengthen their health systems.[4].

However, the debt burden is part of a structural context, characterized in Africa by insufficient capacity to supply goods and services and the specialization of economies in exports of low value-added commodities. It is, in relative terms, much lower than in rich countries.[5]The continent is seriously lacking the infrastructure (roads, energy, water, etc.) needed to accelerate its growth and meet the boom in demand, fueled by demographic expansion and the rise of the middle classes. Faced with the devastating effects of the pandemic, voices are being raised for Africa to free itself from the constraints of budgetary austerity and launch ambitious investment programs.[6], reviews its insertion in international trade and strives to define an “endogenous paradigm of development”[7], more equitable and sustainable, freed from the prescriptions of the International Monetary Fund and the World Bank. The Bretton Woods institutions, however, seem to be giving in to reality, and they will in any case be at the forefront of facilitating the exit from the recession, given the colossal indebtedness of the usual donor countries, even if they have a key role to play in reducing or even erasing the debt of African countries.

One thing is certain: we must break the vicious circle whereby low-productivity economies can only finance limited public spending, which in turn curbs growth potential, while the needs – economic, social, environmental, security, etc. – are enormous and constantly increasing. This is one of the major reasons why, in Africa, the share of tax revenue in GDP is half that of OECD countries on average.[8]. This is certainly not the only explanation.[9] and the creation of the African Continental Free Trade Area (AfCFTA) risks worsening the situation in the short term[10]But if the grand declarations on agriculture and health fail to achieve their objectives, it is first and foremost because, due to insufficient wealth production, states struggle to release the necessary resources. Therefore, their words remain a dead letter.

[1] The seven commitments of the Malabo Declaration are: (i) recommitting to the principles and values of the CAADP (Comprehensive Africa Agriculture Development Programme) process; (ii) strengthening financing for investments in agriculture; (iii) eradicating hunger in Africa by 2025; (iv) halving poverty by 2025, through inclusive agricultural growth and transformation; (v) boosting intra-African trade in agricultural commodities and related services; (vi) strengthening the resilience of livelihoods and production systems to climate change and other related risks; and (vii) strengthening mutual accountability for actions and results. Source: Biennial report to the AU Assembly on implementing the June 2014 Malabo Declaration, The 2nd Report to the February 2020 Assembly.

[2] Abdoul Fattath Tapsoba, “So far from Malabo”, FARM Blog, March 23, 2020, https://fondation-farm.org/si-loin-de-malabo/

[3] Source: African Union, Africa Dashboard on Domestic Financing for Health, 2018.

[4] In 2019, the amount of interest paid on public debt was equivalent to twice the health budget in Nigeria and three times in Kenya. Source: “African economies are spending up to five times their health budgets on debt repayments,” Quartz Africa, April 30, 2020.

[5] In 2019, the public debt of European Union member states amounted on average to 79.% of GDP compared to 50.% in sub-Saharan Africa.

[6] "To cushion the shock of the coronavirus, OECD countries are announcing that they will free themselves from the prevailing rules regarding deficits and debt. African states must proceed in the same way and be allowed to do so. We must be clear: in any case, it will be very difficult for them." (Jean-Hervé Lorenzi, president of the Cercle des économistes, in Jeune Afrique, March 26, 2020).

[7] Kako Nubukpo, “After the coronavirus, another Africa is possible and it is not a utopia”, Le Monde Afrique, April 4, 2020.

[8] In 2017, taxes, duties and social security contributions represented on average 17% of GDP in the 26 African countries studied, compared to 34% in the OECD. Source: “Revenue Statistics in Africa 2019”, OECD/ATAF/AUC.

[9] The narrow tax base in Africa is also due, among other reasons, to the size of the informal sector, the prevalence of poverty, and tax optimization practiced by large taxpayers, which allows them to legally evade taxes. According to the latest report on "The African Tax Outlook," published in November 2019 by the African Tax Administration Forum, "large taxpayers generally belong to multinationals that widely practice tax optimization, thus depriving States of substantial revenues." Added to these factors is tax evasion.

[10] Trade taxes, i.e. essentially customs duties, represent on average 12 % of tax revenues in the 26 African countries studied (see note 8). Their abolition should be offset by the increase in taxes and duties due to the increased economic activity generated by the AfCFTA, but it risks, in the short term, posing formidable budgetary problems for the poorest countries. Hence the importance of the mechanisms proposed in the agreement establishing the AfCFTA to facilitate the transition of vulnerable countries to the new system.