The Financing Challenges of Structural Transformations in Africa in the Post-Covid-19 Period: An Opportunity to Rethink the Financial Resilience of the Continent

Abstract

The decline in economic activity and public revenues during the health crisis continues to burden the budgets of African countries. These financial difficulties are due, on the one hand, to the increase in healthcare expenses and, on the other hand, to the support provided to households and businesses during the lockdown period. This situation limits the actions of governments in pursuing structural transformations.

External resources have declined, with net capital flows to low-income and lower-middle-income countries plummeting. The increase in interest rates in developed countries could push heavily indebted nations into a debt crisis. The situation is further exacerbated by the decrease in foreign currency revenues.

The objective of this article is to outline the main causes of the lack of financing in Africa, which hinders the continuation of structural transformations and the achievement of the desired level of development. At the same time, the article highlights the opportunities for development and better integration into the global economy that arise from this crisis. This will necessarily involve the implementation of innovative and resilient financing systems.