Impact of COVID-19 on the fiscal space for agricultural transformation in Africa
Deputy Division Director, Africa Regional Office, IFPRI
Virtual event on:
The political economy of COVID-19:
Impacts on agriculture and food policies
October 22, 2020
Impact of COVID-19 on the fiscal space
for agricultural transformation in Africa
Fiscal policies in response to the Covid-19 pandemic in Africa
Fig 1. Covid-19 response fiscal policies: targets and
instruments (number of African countries)
Not stated; 63%Reprioritize (incl.
defer debt); 23%
Fig 2. Sources of financing Covid-19
response policies (% of African countries)
African countries using different fiscal policies to deal with
the health effects and socioeconomic impacts (Fig 1).
The cost of the policies is estimated at 1% of GDP ( US$32
billion) for African countries.
While few of the countries have stated how these will be
financed (Fig 2); the fiscal space seems limited (Fig 3).
Fig 3. Fiscal space for Covid-19 response
policies, selected African countries and
regional averages (% of GDP)
and forgone revenue
Loans, equities, and
Data sources: Based on IMF covid-19 policy tracker and emergency financial assistance by
region (IMF 2000 https://www.imf.org/en/Topics/imf-and-covid19)
Concern for CAADP and Africa’s agricultural transformation
Fiscal space in Africa improved in 2000-2007; but has shrunk since the
global financial crisis (Fig 4).
Interest payments has been rising rapidly since the global financial
crisis (6%/yr) and squeezing public investment in especially agriculture
and infrastructure (Fig 5).
Spending on agriculture is already too low (< 1% of GDP/yr).
CAADP = Comprehensive Africa Agriculture Development Programme
Data sources: Based on GFS (IMF 2020), SPEED (IFPRI 2020), WDI (World Bank 2020), Kose et al.
(2020: http://www.worldbank.org/en/research/brief/fiscal-space), and BR reports (AUC 2018, 2020).
92 79 92 94 100
8 21 8 6
1st BR 2nd BR 1st BR 2nd BR 1st BR 2nd BR
Fig 6: CAADP Biennial Review (BR):
progress in achieving goals of the
Malabo Declaration (% of countries)
Will further retard progress in CAADP:
Fewer countries on-track overall
None on-track for the targets on
enhancing agricultural investment
2000 2003 2006 2009 2012 2015 2018
Fig 4: Fiscal space since 2000
(average for Africa)
General government gross debt, % of GDP
Total external debt stocks, % of GDP
Long-term debt ratings, index from 1-21
2.1 3.0 1.9
11.1 12.0 14.1
2000-2006 2007-2009 2010-2017
Fig 5: Government
expenditure (% of GDP)
Other functions Interest
Social Infrastructure, etc.
Increasing fiscal space and building back better
Increasing efficiency spending. Critical
investments (e.g. infrastructure) to:
Mitigate or reduce impacts of shocks
Facilitate more effective and efficient
responses to shocks
Increasing ODA and refocusing its purpose (Fig 7)
Broadening the revenue base and increasing
efficiency in revenue collection:
Including more of informal sector for greater
More progressive taxes
Institutionalizing fiscal rules and stabilization
funds for flexibility in managing shocks
Using medium-term expenditure frameworks for
credibility and transparency in budgeting
Data sources: Based on GFS (IMF 2020), CRS (OECD 2020), and
WDI (World Bank 2020)
Fig 7: ODA to Africa
% of GDP
ODA, % of
ODA, % of