The Board of Directors of the African Development Bank on Monday approved a EUR88 million loan to Cameroon as direct budget support to finance the country’s COVID-19 crisis response.
The loan, to the country’s COVID-19 Crisis Response Budget Support Programme (PABRC), falls under the framework of the Bank’s COVID-19 Rapid Response Facility (CRF) of up to $10 billion, the institution’s main channel to cushion African countries from the economic and health impacts of the crisis.
The same Board had also on the same day approved two other loans for Togo and the Seychelles all for the enhancement of the countries to get better equipped to fight and survive the coronavirus pandemic.
The approval on 18 June, enables required funds from a previously approved African Development Fund (ADF) loan to be channeled to the Togo Agro-Food Processing Project (PTA-Togo), for the purchase of fertilizers, organic pesticides and seeds for approximately 150,000 smallholder farmers. The implements will help farmers to handle the effects of COVID-19 during the coming cropping season.
Since the World Health Organization declared COVID-19 a pandemic in March, African governments have adopted strict containment measures, which have had adverse economic effects across the continent. The health crisis has already disrupted food chains through its impacts on food supply and demand, and a decline in producers’ purchasing power, production capacity and access to agricultural inputs.
Togo is highly dependent on its agricultural sector, which accounts for more than 40% of GDP and employs almost 65% of its active population. If the pandemic persists, the risk of a food crisis similar to that of 2008 is quite high. The Government of Togo wants to avert such a crisis by taking the appropriate measures, in particular by purchasing quality agricultural inputs for producers The use of these inputs is projected to boost additional production of 12,700 tonnes of maize, 18,000 tonnes of rice, 1,700 tonnes of sesame seeds and 2,200 tonnes of market garden produce.
And for Seychelles, the $10m approval is to shore up declining revenues, the Seychelles government recently amended its budget to respond more effectively to COVID-19, taking on an immense financial burden as it works to enhance the countryâ€™s health systems, mitigate job losses, and redress lost business and household incomes.
The amended budget provides for an additional $3.6 million to the health sector, which will help put in place robust early-detection surveillance systems and enhanced testing capability at points of entry. The government is also readying isolation and quarantine facilities ahead of the resumption of international flight arrivals.
The Government has committed to safeguard 37,409 private-sector jobs through provision of a six-month wage grant while also increasing allocations to the national Social Protection Agency to widen safety nets for informal workers and other vulnerable groups.
In Cameroon, the pandemic has revealed the structural weaknesses of the country’s health system and economy, particularly the limited human and financial resources allocated to the health sector.
The PABRC’s goal is to check the spread of the coronavirus, to save lives and to mitigate its adverse socio-economic effects on the Central African country, particularly on households and businesses. The programme also involves longer-term actions to build the resilience of the economy as a basis for recovery.
It will support the implementation of a health response plan to improve testing and ensure early detection and rapid management of the virus, thus reducing case fatality and improving the recovery rate. It will also support the most vulnerable in society by paying family allowances to staff of companies unable to pay social security contributions as well as distributing health kits.
â€œWomen play a key role in the fight against the spread of COVID-19 as wives, mothers, caregivers and community resource persons. The social protection and economic resilience actions under this support will particularly target women and the households and businesses headed by them,â€ Bank Acting Director General and Country Manager for Cameroon, Solomane Kone said.
Measures to sustain economic activity and safeguard employment will include value-added tax (VAT) credits to restore the cash position of enterprises as well as procuring inputs to support strategic agricultural value chains including poultry, fish, seeds and cereals. It will also support key small and medium-sized enterprises in the agribusiness, health and education sectors.