ADA Invited to the High Level Virtual Workshop on the Covid-19 Crisis in Africa
On January 15th, Laura Foschi, Executive Director of ADA, participated in the webinar entitled "Social Response and Microfinance", organized by the Ministries of Planning and Development, Social Affairs and Microfinance of Benin in partnership with the Confédération des Institutions Financières d'Afrique de l'Ouest (CIF). This two-day high-level virtual international workshop focused on sharing experiences of African States and representatives of international organizations, with the main objective of helping Africa to better address its interventions in the social field and see how microfinance can respond to the COVID-19 crisis management.
At the first signs of the COVID-19 pandemic, African governments took steps to build resilience, not only to the health but also to the economic and social crisis.
Benin has set up Health Cords to avoid a total paralysis of activities, the granting of a subsidy to populations via cash transfers to their cell phones, support for an amount of 63.38 billion FCFA to businesses (including interest-free loans), 4.98 billion in support for craftsmen and those engaged in small trades, as well as a general subsidy that applies to all citizens, particularly on electricity and water rates for an amount of FCFA 5.76 billion, etc....
The situation of small-scale agricultural producers remains worrying, as indicated in the latest semi-annual report of the World Bank on the economic situation in the region, that due to the pandemic, production losses in sub-Saharan African countries could amount to between 37 and 79 billion dollars in 2020.
Impacted differently depending on the region, local financial services in Africa are being called upon to contribute to the crisis management system. In this context, the strategic and operational orientations tend to favor the digitalization of means of payment, which has been identified as an effective response to the health crisis. For example, several African governments have proposed support payments, via the digital infrastructure and the MFI networks, for the benefit of low-income populations. While inclusive financial systems are understood as part of the solution, there is a need to reflect on how to adapt their interventions more effectively.
Beyond the initiatives taken by African countries, one question remains: What are the best approaches to adopt so that Africa can withstand the economic, financial and social crisis due to COVID-19?
This two-day virtual workshop tried to answer to this question and many others with the following main objectives:
- See the effects of COVID-19 on proximity financing and the informal sector (small producers, MSMEs) ;
- Draw lessons from social responses and measures taken by governments and microfinance actors in Africa to mitigate the social and economic risks ;
- Identify the complementary needs of the actors for the continuity of their activities in support of the targeted populations;
- Take the role of each actor in the resilience of small producers, MSMEs.
Two panels were held:
- 1st panel: Ministers of Microfinance and Social and Solidarity Economy of many West African countries discussed the issue of "Measures taken by African States to mitigate the social and economic risks related to COVID - 19".
- 2nd panel: Professionals and representatives of international organizations, including Laura Foschi, Executive Director of ADA, shared their experiences and adaptation strategies for more effective interventions in social and microfinance in the panel entitled "Community finance in the mitigation of social and economic risks related to COVID-19".