Calls for fiscal consolidation, private sector involvement in Southern Africa's economic recovery

Government officials and experts under the Inter-Governmental Committee of Senior Officials and Experts of Southern Africa have said that fiscal consolidation and structural reforms are required to restore external balance, preserve debt sustainability and stimulate inclusive growth over the medium-term during the pandemic.

The meeting held in Lusaka, Zambia, on Oct 29 brought together delegates and participants from Angola, Botswana, Eswatini, Lesotho, Malawi, Mauritius, Mozambique, Namibia, South Africa, Zambia and Zimbabwe. The ministries of agriculture, commerce, economic development, finance, foreign affairs, industry and trade from member countries were also represented.

Thabo Sofonea, Lesotho's minister of finance, said while officially opening the forum that the region is operating in a COVID-19 environment which has impacted negatively on socio-economic issues in Southern Africa.

He said that although the current response to the pandemic was through emergency health and economic mitigation measures, fiscal consolidation and structural reforms were required to restore economic balance. He also pointed at the pivotal role the private sector, especially micro-, small- and medium-sized enterprises have to play in the recovery process geared toward the attainment of Sustainable Development Goals.

The meeting, which was themed "Policies and strategies towards effective private sector-led growth and job creation in Southern Africa", saw delegates elect Lesotho as the new chair of the Inter-Governmental Committee of Senior Officials and Experts of Southern Africa and Malawi as vice-chair.

"This year's theme is consistent with the global and regional development frameworks which include the United Nations Sustainable Development Goals, the African Union Agenda 2063, the Southern African Development Community's Regional Indicative Strategic Development Plan and Vision 2050, " Sofonea said.

He added that through regional unity, Southern Africa countries were able to launch on April 2, 2020, the domestic and international humanitarian appeal for assistance with a budget of $1.8 billion for COVID-19 support in conjunction with the United Nations.

"In addition, we have achieved the implementation of the Vulnerable Farmers Input Support Programme, which provides free agricultural inputs to its beneficiaries. Last but not least we have offered assistance to small and medium enterprises to quickly resuscitate their businesses and recover from the effects of COVID-19 through the SME Development Corporation and other development banks which will enable them access working capital," Sofonea said.

While delivering a message from the UN, Sizo Mhlanga, the United Nations Economic Commission for Africa director for Southern Africa sub-regional office, said that the pandemic had affected the capacity of some countries to meet debt-servicing obligations and thus accelerated the onset of debt unsustainability.

"The COVID-19 crisis has indeed highlighted the need for accelerating the building of productive capacities and the implementation of national and regional industrialization strategies as well as improving and strengthening the business environment to unleash opportunities for the Southern African private sector in the sub region and the rest of the continent," Mhlanga said.

On her part Myranda Lutempo, the representative of the African Union South African Regional Office, pointed at the need for all regional activities to be implemented on a continental level to ensure sustainability. Lutempo advised that the African Union Commission was promoting economic integration and private sector development through several key flagship projects under Agenda 2063. She also acknowledged the critical role that the micro-, small- and medium-sized enterprises sector played in inclusive economic growth and sustainable job creation during the pandemic.