African public authorities should react swiftly and efficiently to introduce urgent reforms to improve the business climate and establish an environment conducive to investment in tune with the requirements for the creation of innovative companies, Governor of the Central Bank of Tunisia Marouane Abassi said Thursday.
In his speech on behalf of the President of the Republic Kais Saied, at the opening of the international conference “Financing Investment & Trade in Africa” FITA 2021, held on June 25-26 in Tunis, Abassi said the COVID-19 health crisis and its negative impact on the world economy in 2020 have shown the limits of globalisation. Despite its contributions to the world economy, it has revealed major deficiencies relating to the breaking of chains of supplies.
This pandemic has shown the importance of proximity. That is why, Africans should focus on strengthening regional and sub-regional cooperation, he indicated.
Abassi spoke of the weaknesses of pan-African cooperation in terms of trade (14.4% in 2019), adding that trade in goods on the continent hardly exceeds 2.5% of world trade, in addition to the deterioration of the debt ratio, which is around 70% of GDP.
For Tunisia, trade with the Continent (excluding Arab countries) continues to represent minimal shares in overall foreign trade, i.e. 2% of exports and only 0.5% of imports.
Abassi pointed out that major challenges are to be met by African countries so as to revive economic activity as soon as possible, control debt and overcome the growing difficulties impeding access to international financial markets, in addition to providing guarantees to stable funding on affordable terms.
“The IMF estimates at 285 billion dollars the additional funding needed by African countries over the period 2021-2025, nearly half of it should target low-income countries,” he said.
“Bilateral and multilateral cooperation represents an ideal springboard for the revival of investment and growth in our countries.
The private sector, by its dynamism and responsiveness, is the spearhead of this recovery, as well as non-governmental initiatives, through which the Tunisia-Africa Business Council (TABC) is an edifying example, “according to Abassi.
In Tunisia, the contribution of the financial system was decisive in managing the crisis through the implementation of unconventional mechanisms and actions allowing to lighten the financial burdens of businesses and households, and replenish the liquidity of economic agents, including the State.
“This role must be consolidated across the continent so as to effectively support the recovery of economic activity, by strengthening the capacities of the system, improving digital-based financial services, for the benefit of companies as well those operating in the conventional fields as the start-ups and Fintech “, he estimated.
Abassi also underlined that the regulatory authorities, namely the central banks, have a decisive role to play, not only as institutions of macroeconomic stabilisation and preservation of financial balances, prerequisites for the revival of local and foreign investment, but also as a provider of economic agents of a reliable tool for anchoring expectations and the visibility necessary in an environment marred by uncertainty.
The BCT is working with its peers and partners from the continent to boost cooperation in the fields of finance, integration and upgrading African payment systems but also to develop statutes of the African Monetary Institute, expected to put an end to the creation of the African Central Bank.
“However, the combined efforts of the various stakeholders with a view to bringing together the conditions for resuming economic growth, employment and inclusive and sustainable development cannot achieve the expected objectives without the implementation of common structural policies.
These require combined efforts at bilateral and regional level and fit into the promotion of the digital economy and sustainable development (green economy), within the framework of a global policy of post-COVID recovery, “he said.
According to Abassi, in the immediate future, the top priority is to defeat the pandemic, which inevitably involves large scale vaccination of populations.
There is also need to choose promising priority projects, mobilise international support to back the vast recovery plans of African countries, implement digital transformation in Africa, increase investments in sectors aimed at financial inclusion, such as fintech and electronic commerce, reduce the energy deficit by developing traditional and renewable energy sectors, and strengthen air, land and sea links.

Source: TAP News Agency