Economists root for Trust Funds to manage pandemic in Africa

They said this at the biannual African Economic Research Consortium (AERC) workshop held virtually

In Summary
  • The research consortium is headquartered in Nairobi 
  • Prof Germano Mwabu said the trust will come in handy  handy to finance what he described as "Covid-19 like crises" to reduce economic inequality challenges.
Former Central Bank of Kenya governor Prof Njuguna Ndung'u. Photo/ file
Former Central Bank of Kenya governor Prof Njuguna Ndung'u. Photo/ file

Economic scholars want Kenya to establish a dedicated trust fund to mitigate growth challenges in the wake of a pandemic.

Led by Prof Germano Mwabu, they said the trust will come in handy  handy to finance what he described as "Covid-19 like crises" to reduce economic inequality challenges.

The trust fund  works better as conventional mechanisms that initiate and sustain pro-growth poverty reduction have been proven ineffective in times of the Covid-19 pandemic,'' Mwambu said.

The scholar said this while delivering  a research presentation on Poverty, Growth, Redistribution, and Social Inclusion in Times of Covid-19 Pandemic in Africa at an international virtual research workshop hosted by the African Economic Research Consortium (AERC).

He noted that further research would be required to identify how Governments in Africa could have implemented anti-Covid-19 measures with minimal economic disruptions.

"In a pandemic such as the Covid-19 period, policies designed to sustain the virtuous spiral of pro-poverty reduction growth should focus more on addressing effort-based inequalities than those due to circumstances. A Trust Fund to finance Covid-19 like crises is needed,"  Mwabu said.

Apart from Mwambu, Simopne Schotte of the United Nations University World Institute for Development Economics Research (UNU-WIDER) presented a study titled "The Labour Market Impact of Covid-19 Lockdowns: Evidence from sub-Saharan Africa", disclosed that the pandemic's shock had exposed and exacerbated pre-existing vulnerabilities in Ghana.

The fellow noted that lockdowns had slowed down recovery prospects in his study, featuring Kenya, Ghana, and South Africa. The labour market, he said, is still suffering from anxiety; despite signs of recovery.

AERC, the global economic affairs think tank headquartered in Nairobi and led by former Central Bank of Kenya Governor Professor Njuguna Ndung'u, hosted the Biannual Research Workshop Plenary Session. Hundreds of Economic Policy Researchers, Scholars, Public Policymakers, non-state actors and practising Economists participated in the Virtual Research Workshop.

Commenting on study findings, AERC executive director Prof Njuguna Ndung'u said the global think tank would continue supporting such forums to foster economic affairs awareness.

"Such plenary sessions have informed, influenced, and inspired researchers and the wider public on a wide range of issues relevant to policymaking. This workshop sought to lead and explore a viable path to recovery from Covid-19," Ndung'u said.

Research indicators, Ndung'u, confirmed indicate that policy responses to combat the pandemic led to significant social and economic disruptions.

Evidence suggests that at the height of the lockdown (March, May, June 2020), Africa's GDP shrunk by five per cent. During the entire period, the continent's GDP declined by 2.5 per cent.

The workshop was graced by various dignitaries including Kenya's Commission on Revenue Allocation (CRA) chairperson  Jane Kiringai who chaired a plenary session on public private sector policy.

Others are British economist and political scientist James Robinson, of the University of Chicago who delivered a memorial lecture on "Africa's Latent Assets" in honour of the former Governor of the Bank of Tanzania and renowned African Economist, the late Prof Benno Ndulu, who passed on earlier this year.

The biannual workshop  provide an opportunity for monitoring the progress and quality of the various research projects seeking solutions to problems facing the management of economies in sub-Saharan Africa.