FLF Africa launches financial literacy for coronavirus alleviation(FLICA)

Members of our eminent Advisory Board, Country Representatives, friends in the Media, you are warmly welcome to the Press Launch of Financial Literacy for Coronavirus Alleviation(FLICA). With the outbreak of the novel coronavirus on the 31st of December 2019 in China, it has fast become a global pandemic.

Globally, there are currently 12,164,119 confirmed cases and 552, 023 deaths as of July 09, 2020.

The UN asserts that nearly 30 million more people could fall into poverty. The IMF estimates the economic impact of the virus will be a global recession like the levels seen in the financial crises of 2008(a 2.5% contraction) and at best a no growth in 2020.

For Sub-Saharan Africa, the situation is even worse as nearly 10(ten) years of economic progress is said to have been wiped out by the Pandemic.

Real Per capita GDP is now projected to contract by 5.4% in 2020(a double of what was projected in April 2020)

According to OECD, the COVID-19 shock to African economies is coming in three waves:

(i) lower trade and investment from China in the immediate term; (ii) a demand slump associated with the lockdowns in the European Union and OECD countries; and

(iii) a continental supply shock affecting domestic and intra-African trade. It is shaking commodity-driven growth models that had largely failed to create more and better jobs or improve well-being.

In the short-term, the recommendation is that fiscal and monetary measures should channel liquidity to Micro, Small and Medium Enterprises, households and informal workers, especially in the most vulnerable economies.

The pandemic thus poses significant risks not only for people’s health but also for their economic well being. Already low-income earners, especially informal workers, who earn a living on a day-to-day basis and have limited or no access to social safety nets, are severely hit and suffering disproportionately from the adverse effects.

At FLF Africa, we believe lack of financial literacy will lead to poor financial choices and decisions, which could result in undesired financial and economic consequences for the entire economy of Africa.

Financial literacy will assist the ordinary African worker to process economic information and make informed decisions about their finances in order to cope with the growing hardship in these covid19 moments.

Unfortunately, the majority of Countries on the continent lack a strategic, coordinated and intentionally driven approach to financial literacy.

Against this backdrop, FLF Africa is launching this project - the Financial Literacy for Coronavirus Alleviation (FLICA) - today across the continent. FLICA will provide financial literacy to the formal and informal sectors on how to handle the economic and financial hardship arising from the covid-19 pandemic for financial wellness.

As part of our strategic goal to reduce extreme poverty in sub-Saharan Africa; FLICA will help achieve four critical objectives;

i) educate individuals on personal financial prudence to mitigate financial crises emanating from reduced incomes, sudden job losses, and increased health cost due to the Covid-19 pandemic.

ii) assist in closing the financial inclusion gap and help low income earners as well as MSMEs (which constitute an important source of revenue for poor households) to achieve financial wellness, access available stimulus packages, make the most of their cash flows, tax returns, savings, credit, investments, mortgages, insurance and pensions.

iii) avert the risk of making ineffective financial decisions, increasing debt and becoming victims of abusive financial practices

iv) potentially strengthen the efficiency of financial markets in Africa. Consumers who are better informed about financial risks and opportunities, and who are more aware of their own rights and responsibilities in relation to financial institutions can contribute to developing better functioning financial markets (alongside appropriate regulation and consumer protection).

This continental project is geared towards all the 46 countries in sub-Saharan Africa and aims to achieve financial independence for 8 out of every 10 individuals by 2030. As a deliberate strategy, our Informal Sector reach will cover the mass rural (farmers, fisherfolk, deprived communities) and mass urban (market women, street hawkers, traders, retail sellers, etc.).

The Formal sector will also reach workers in the private, public, social sectors (mass, middle class, and high net worth), pensioners, entrepreneurs, students across primary, secondary, tertiary, vocational and technical levels.

Our “IES” approach will Inform, Engage and Support people through practical and impartial education to build their financial awareness and encourage informed money decisions for their financial wellbeing especially in these hard-economic times of Covid-19.

This strategic approach will address attitudinal and behavioural barriers to our goal of financial wellness through public education (audio, visual, online and on-air channels with resource materials) in both official and local country languages.

It will also engage governments in addressing structural barriers to achieving long-term, continental improvements in institutionalizing financial literacy.

In addition, FLICA will employ consistent, strategic and collaborative partnerships with institutional stakeholders such as donor agencies, ministries of finance and economic planning, regulatory bodies, community service, education service, health service, security service, academia, industry and professional bodies in achieving our financial wellness for all objectives.