Building forward together: financing a sustainable recovery for the future of all

Abstract

The economic damage to developing economies triggered by COVID-19 can be transformed from a threat to global growth, into an accelerator of global prosperity. Rapid financial support, developed and deployed in concert between developing countries and the major players of the global economy, public and private, will reinject growth momentum into economies which were among the world’s fastest growing prior to the pandemic. Africa’s growing economy and society will be a major part of the future of global economic growth. The potential of its growing and young population, as well as the investment and productivity opportunities in its developing free trade area, communications and digitalization drive, its biodiversity, global carbon sinks, and renewable energy potential, are all at the leading edge of a sustainable world economy Making the continent a global powerhouse of the future is the vision of Agenda 2063 and the task for the Sustainable Development Goals (SDGs) in Africa for 2030. This paper explores the options for increasing fiscal space for emerging and frontier economies as a response to the crisis. It has a particular focus on Africa. Swift action not only supports developing countries but sets the global economy on a more sustainable, long-term growth footing. This paper proposes a three pronged road-map of precise, feasible actions in the current response phase of the crisis which set up strategic actions in subsequent recovery and reset phases. No one set of solutions will fit all cases. However, these are immediate actions that can and must be taken by developing and developed economies, by the public and private sector together, to restore liquidity, handle insolvency, and build the foundations for recovery, continuing the process of rebooting the system and delivering on Agenda 2063 and the SDGs.