Romuald Wadagni on RFI: All topics covered

On the occasion of the CEO Forum in Africa, the Minister of Economy and Finance of Benin was on Saturday 11 June 2022, the “Great Guest for the Economy” by RFI-Jeune Afrique. The Treasurer of Benin spoke about several issues affecting the economic life of the African continent. Read Minister Romuald Wadani’s full speech below.

Jeune Afrique: Romuald Wadagni, you are a strong advocate of the private sector, the return of the Africa CEO Forum, two years after Covid, is a sign that everything is once again possible on the continent. Is the epidemic forgotten?

Romuald Wadani : No, this does not mean that we are no longer thinking about the pandemic, but that we should move forward. We must find a way to live with the epidemic.

The return of the ACF has been eagerly awaited as it is the main platform where senior decision makers in the private sector meet among themselves and also benefit from the presence of political decision makers to reflect on the issues facing each other.

Back to economic news. In recent months, in Benin, as elsewhere in the world, we have seen the return of inflation. Is it related to a real shortage or speculation? What do you notice in your country?

Today is a mixture of the two. We observe the phenomenon of speculation on certain products whose prices we have regulated, such as oil. Some traders hold their shares and try to sell them under cover. But more important is what happens with the price of agricultural inputs rising.

The real threat is that during the next campaign there will be no agricultural production. This shortage will not be due to speculation, but will be very real. You have heard President Macky Sall warning of the danger of famine in Africa. If nothing is done to ensure that African countries have input – and this may be a bit too late for the 2022-2023 campaign – then crop prices will be higher.

What can governments do to reduce social harm?

There are four types of measurements. The first is the waiving of taxes and tariffs to allow the price to be affordable for the population. If we leave the same levels of VAT and customs duties, the products will be more expensive for the population. Therefore, we need a full or partial waiver of these duties on most consumer products, while being careful not to penalize local industries.

The second category of measures is direct subsidies, for example on diesels. Obviously, we will continue to absorb this shock. All construction machinery, tractors, factories and public transportation use diesel. Failure to act will have dire consequences for productivity and wealth creation. So we’re putting money on the table to slow the impact of price hikes.

The third type of measures is the regulation and control of prices for heavily subsidized products, for which we want to ensure that the population benefits from state support. The fourth measure is the creation of social safety nets. Part of our population suffers from extreme poverty and we must ensure that these people have minimal access during the crisis.

Can the state continue these efforts over time?

We will remain resilient for as long as necessary because the lives of our residents are at stake. Whatever it takes – whatever it costs. The good news, if I may say so, is that this is a global phenomenon. We are discussing with various members of the international community. We are not isolated.

Macky Sall, as chair of the African Union, recently went to Russia to convey the voice of the continent to President Putin and expressed concern about the difficulties African countries face in obtaining grain. Senegalese head of state fears a famine. Is this really the case in Benin?

This is not the case, even if part of the population suffers from high prices. The threat of famine mainly comes from the lack of inputs that can harm agricultural production. The real difficulties will come next year.

But for Benin, and this is a unique situation, we have managed, by anticipating 2021, to ensure that our farmers benefit from the inputs for the 2022-2023 campaign.

Why did you create a repository of inputs?

It was the uncertainty associated with Covid that drove us to do this. The idea was to say: If freight keeps going up, if boats and containers aren’t being traded, we should expect. Of course, we did not know in December when we were preparing the budget that the war would break out in February. But macroeconomic analysis, price evolution, and logistical problems at a global level have prompted Benin to expect. When you ask me if famine exists, I can answer no.

Let’s go back to Macky Sall’s comments about the war in Ukraine. The impartiality of the Senegalese president in this file is also the position of Benin?

The position of President Macky Sall is that of the Chairperson of the African Union, which takes into account the fact that not all countries of the continent have the same sensitivity. Benin’s position is simple: we condemn violence as a means of resolving conflicts. We expressed it before the United Nations. Whatever the reasons for conflict may be, we believe it is always possible to sit around a table and discuss. War is not a solution.

Another major challenge to the current crisis is access to energy. What do you do when you have made commitments to reduce your impact on the climate and you need to develop your industry?

In fact, access to energy that is available in large quantities and at the right price is one of the factors upon which manufacturing depends. Electricity costs 3 or 4 times as much in Africa. At the same time, we made commitments on the climate. But this day weighs heavily on the ability of African countries to develop. All gas projects are struggling for financing. Due to our delay, we must amend our commitments.

Benin and Nigeria are two countries with linked destinies… However, recent years have been turbulent, and the borders have been closed, which has had dire consequences for regional trade. What lessons have you learned from this crisis?

The lesson is simple: our two countries need to work together more. Over the past thirty years, there have been many tensions. The two heads of state met, formed a working group and took a certain number of measures at the diplomatic, customs and purely economic levels.

The idea of ​​the new dynamism of cooperation with Nigeria is simple: to ensure that the product arriving in Cotonou port of Nigeria can go through all formalities on site in order to make trade relations more flexible. When we talk about smuggling, we are talking about rice that crosses the border into Nigeria, but 80% of the gasoline sold in Benin comes illegally from Nigeria. The truth is that both countries understand that we must act differently.

It has invested a lot at the sub-regional level in the reform of the CFA franc. Led by an uproar in 2019, it seems to have fallen into oblivion…

The outlook has changed amidst instability. There are actually two fixes. The first on the Uemoa level concerns the CFA franc.
The second, takes place within the framework of the Economic Community of West African States so that the fifteen member states adopt a common currency.

With regard to the CFA franc, the reform provided for the closing of the operating account with the French Treasury and the replacement of French representatives in the currency management bodies. It is active today. However, the switch from CFA franc to Eco could not be implemented, first because of Covid and now because of the war in Ukraine.

Romuald Wadagni, Africa is still waiting for $100 billion, which corresponds to the International Monetary Fund’s Special Drawing Rights that rich countries can cede to developing nations. Last year I was optimistic. But at this level, nothing has changed either.

If you ask me the question again today, I will answer you with the same optimism as it was a year ago. Of course, we are waiting for DTS. mentioned by President Macky Sall. I am also during conversations with my colleagues, for example the French Minister.

DTS is coming, that’s for sure. After Covid, the war in Ukraine mobilized the efforts of the international community. We had hoped to lift the ban during the Spring Meetings of the International Monetary Fund, in April, but it did not happen. But it is a matter of time.

French President Emmanuel Macron has been re-elected for a 5-year term. Does this reassure you in the current context?

One of the things we admire about countries like France or the United States is their strong management, which ensures the continuity of the relationship, including when leaders change. However, when resetting the boss, it’s helpful to know what you can expect.

Was the French president able to renew France’s relationship with the continent as he wished, or is there still doubt about intervention?

French speech should always be placed in a specific context. There is no talk of Africa, but there are leaders who position themselves according to circumstances. If I take the case of Benin, I don’t remember any French statement that took a position on one point or the other. When there are issues for France, its citizens or its companies, it is understandable that its leaders speak out.

What should France do to be more popular among Africans?

Ask France… When you hear President Macron’s call for more resources to be provided to developing countries during the Covid crisis and for France to stand with Africa and with economies ready to reform, the people applaud.

Finally, the 2026 presidential election in Benin, is it already on your mind?

No, that would be inappropriate. I don’t do jargon. We have four years before that deadline. I have a job that requires a lot of energy. there is a lot to do. And I am convinced that when I take every moment to do well what is expected of me, opportunities open up naturally.

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