Economy & Politics
ECOWAS ministers recommend gradual re-opening of borders
ECOWAS has recommended the gradual re-opening of the borders of member states.
Ministers from the Economic Community of West African States (ECOWAS) sub-region have recommended the gradual re-opening of the borders of member states in the first half of July. This is to allow travelers from countries with low or controlled levels of coronavirus cases by the end of July.
This new recommendation was contained in a communique from a virtual meeting that was held last week by Foreign Affairs and Trade Ministers from the West African countries. They called for coordinated efforts to re-open cross border trade that has been seriously hampered by the lockdowns and restrictions due to the coronavirus pandemic.
The Ministers had recommended a gradual and phased opening of the borders.
The first phase involves the opening up of domestic air and land transport in the month of June which many governments within the region have started to do.
The second phase of the recommendation involves the opening of land, air and sea borders within the region by middle of July.
The third phase involves the opening of air and land borders to countries with low and controlled levels of coronavirus cases by July 31. However, this will depend on the evolution of the pandemic.
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These recommendations by the ministers are expected to be presented to the ECOWAS heads of state at a forthcoming summit.
It can be recalled that countries across the ECOWAS trade bloc had imposed different levels of travel restrictions through the land, air, and sea borders as part of the measures to contain the dangerous spread of the coronavirus disease.
This has delayed the take-off of the African Free Trade Zone (AFCFTA), which has been referred to as the world’s largest free-trade zone. The implementation of the trade agreement which was to take off on July 1, 2020, had been postponed to January 1, 2021.
The border closure had negatively impacted on the cost of goods especially food prices. It has also affected exports among member states.
However, it remains to be seen, whether the recommendations will be approved by the heads of states of member countries as there has been reported spike in confirmed cases within the last week especially in a country like Nigeria, which is the largest country in the sub-region.
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IMF lifts 2021 global GDP growth to 6%
The group also warned that economic recoveries are diverging dangerously across and within countries.
The International Monetary Fund has lifted its global growth outlook to 6% in 2021 (0.5% point upgrade) and 4.4% in 2022 (0.2 percentage point upgrade), after an estimated historic contraction of -3.3% in 2020 due to the effects of the COVID-19 pandemic. This disclosure was made on the organisation’s website on Tuesday.
The group also warned that economic recoveries are diverging dangerously across and within countries, as economies with slower vaccine rollout, more limited policy support, and more reliance on tourism do less well.
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What the IMF is saying
“The upgrades in global growth for 2021 and 2022 are mainly due to upgrades for advanced economies, particularly to a sizeable upgrade for the United States (1.3 percentage points) that is expected to grow at 6.4 percent this year.
This makes the United States the only large economy projected to surpass the level of GDP it was forecast to have in 2022 in the absence of this pandemic.
China is projected to grow this year at 8.4 percent. While China’s economy had already returned to pre-pandemic GDP in 2020, many other countries are not expected to do so until 2023.”
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On divergent recoveries
The IMF stated that divergent recovery paths are likely to create wider gaps in living standards across countries compared to pre-pandemic expectations.
“The average annual loss in per capita GDP over 2020–24, relative to pre-pandemic forecasts, is projected to be 5.7 percent in low-income countries and 4.7 percent in emerging markets, while in advanced economies the losses are expected to be smaller at 2.3 percent,” they said.
“Faster progress with vaccinations can uplift the forecast, while a more prolonged pandemic with virus variants that evade vaccines can lead to a sharp downgrade. Multispeed recoveries could pose financial risks if interest rates in the United States rise further in unexpected ways.“
For Africa, IMF forecasts economic growth of 3.4% in 2021 and 4% by 2022, Nigeria is expected to grow by 2.5% in 2021 and 2.3% by 2022, while South Africa is projected to hit growths of 3.1% and 2.0% for the respective years in focus.
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In case you missed it
The International Monetary Fund (IMF) identified some factors that hamper the economic recovery of low-income countries from the devastating impact of the coronavirus pandemic, factors including access to vaccines, limited policy space to respond to the crisis, the lack of means for extra spending, pre-existing vulnerabilities such as high levels of public debt in many low-income countries and sometimes weak, negative, total factor productivity performance in some low-income countries. These factors continue to act as a drag on growth.
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