Consultant: Developing a Special Report on Financial Inclusion Policy Responses to COVID-19 in Africa

1. AFI & Project Background

The Alliance for Financial Inclusion (AFI) is an innovative, member-driven organization that enables policymakers in developing countries to share their knowledge of financial inclusion policies that have delivered tangible results. The network currently comprises 99 central banks, government ministries and other financial policymaking institutions from more than 88 emerging market & developing countries. Through providing members with the opportunity for peer learning and supporting technical level knowledge exchange on key aspects of financial inclusion policy, AFI works with its members to influence policy reforms, which results in expanding the reach of quality financial services to the poor.

AFI has 7 Working groups (WGs): Consumer Empowerment and Market Conduct Working Group (CEMCWG), Digital Financial Services Working Group (DFSWG), Financial Inclusion Data Working Group (FIDWG), Financial Inclusion Strategy Peer Learning Group (FISPLG), Global Standards Proportionality Working Group (GSPWG), Inclusive Green Finance Working Group (IGFWG) and SME Finance Working Group (SMEFWG). WGs are the key source of policy developments and trends in financial inclusion and serve as “communities of practice” on key financial inclusion issues. They are the primary mechanism for generating and incubating knowledge in the AFI network and provide a platform for knowledge exchange and peer learning to allow policymakers to share, deliberate and deepen knowledge and understanding on key financial inclusion issues.

While AFI’s working groups provide leadership and expertise in clearly defined traditional policy fields, the AFI network is constantly monitoring new developments and maintains a commitment to supporting financial inclusion efforts in emerging fields and regions. The AFI network is engaged in various dedicated regional initiatives: African Financial Inclusion Policy Initiative (AfPI), Latin America and the Caribbean (FILAC), Pacific Islands (PIRI), Eastern Europe and Central Asia (ECAPI) and Arab Region (FIARI)

The impact of AFI’s work over the past decade has been substantial. Since AFI’s launch, members have attributed their participation in AFI with the development and implementation of over 680 financial inclusion policy improvements which have enabled access to formal transaction accounts for over 650 million unbanked people worldwide.

2. AFI COVID-19 Policy Response

Since the offset of the COVID-19 crisis, AFI has taken stock and compiled a comprehensive dashboard on members’ policy responses that address the impact of COVID-19[1].

AFI COVID-19 Policy Response aims to deliver systematic, effective and coordinated policy responses to help AFI members mitigate the effects of COVID-19 on financial inclusion policy implementation, especially for micro, small and medium enterprises and the most vulnerable segments of the population. The AFI Response combines quick, needs-based, highly practical and high-impact interventions that enable the implementation of rapid response policies and regulations in highly-affected countries.

AFI has also conducted a series of virtual engagements with members, tailored to engage technical teams and leadership across the network, as well as address region-specific issues. The virtual meetings are set up to deliberate and present practical policy responses that have the potential to alleviate the impact of COVID-19 on financial inclusion objectives set out by our members.

As part of the efforts to effectively design policy response support, AFI has also conducted a series of member needs surveys shaped to capture specific policy needs and address the effects of COVID-19 on financial inclusion.

The economic impact of the COVID-19 crisis in Africa
Although from a public health perspective, many African countries have had a lower number of COVID-19 cases compared to other continents, the economic impact on the continent has been severe, particularly for informal sector workers, vulnerable population segments and micro, small and medium enterprises (MSMEs). According to the latest GDP forecasts of the International Monetary Fund, Sub-Saharan Africa is expected to experience a -3.2% GDP contraction in 2020, the most severe recession experienced by the Continent since the 1970s.[2] The UN Economic Commission for Africa (UNECA) has estimated that this will result in between 5 million and 29 people being pushed below the extreme poverty line, erasing five years of poverty reduction gains.[3]

Policymakers in many African countries face particular challenges in policy response to the crisis due to limited fiscal space relative to the advanced economies, as well as the large size of informal economies which may blunt the effectiveness of fiscal stimulus measures and inhibit emergency social transfers from reaching the most vulnerable individuals and MSMEs. The region has also experienced significant capital outflows, and reduction in export revenues. Whilst emergency financing has been made available by the IMF and other International Financial Institutions to support effective policy responses in Africa, discussions on significant debt relief or the issuance of new special drawing rights, which would enhance the fiscal space available to policymakers to support an effective economic recovery from the crisis, have been stalling.

Policymakers in the developing world, including Africa, have taken swift and dynamic action to contain the spread of the virus, as well as mitigate the economic impact on economies and livelihoods. Financial sector regulators have been central to the governments’ response to COVID-19, taking measures to ensure liquidity in the system, promote digital payments to replace the hazards of cash and provide relief to financial institutions in order to maintain the stability of the financial sector. However, the full impact of the pandemic on economies is still unfolding and policymakers will need a broader and more innovative set of policy responses in the coming months, to enable businesses and households, especially disadvantaged groups to withstand the economic shock. Furthermore, the pandemic’s effects present a threat to hard-earned development gains made by the global community over the past decades, including those in financial inclusion.

[1] The information can be found at: https://www.afi-global.org/afi-covid-19-policy-response
[2] IMF World Economic Outlook (June 2020), https://www.imf.org/en/Publications/WEO/Issues/2020/06/24/WEOUpdateJune2020
[3] UNECA, ‘COVID-19 in Africa: Protecting Lives and Economies’, https://www.uneca.org/publications/covid-19-africa-protecting-lives-and-…

3. About the AFI COVID-19 Policy Response – Africa Focus

AFIis implementing a COVID-19 Policy Response program in Africa in response to the devastating impacts of the global pandemic.

The aim of the program is to enable financial sector regulators in Africa to deliver quick and appropriately gender-sensitive policy responses that mitigate the effects of COVID-19 on businesses and individuals, especially for MSMEs, women, young people, and Forcibly displaced persons.

Africa is the largest region represented in the AFI Network with approximately half of the overall AFI membership.he COVID-19 Policy Response program in Africa is targeting 49 financial sector regulators and policymaking institutions across the region to strengthen their capabilities to effectively respond to the economic consequences of COVID-19.
The objectives of the project are:
o Mitigate the impact of COVID-19 on the gains that have been made in advancing financial inclusion by AFI members in Africa.
o Capitalize on opportunities presented by this crisis to advance financial inclusion agendas in key areas, such as digital finance, access to finance for MSMEs, inclusive green finance and women’s financial inclusion.
This two-year project prioritizes the two following policy areas which have clearly emerged as a priority for AFI members, in relation to mitigating the impact of COVID-19 on businesses and households and building financial sector resilience:
o MSME finance with the objective of alleviating the impact of the crisis on micro, small and medium enterprises which are disproportionately affected by the dramatic slowdown of the global economy.
o Digital finance with the goal to fast track the uptake of digital financial services to enable governments to make ‘cash’ transfers safely to those who need them, and to allow businesses and individuals to transact in the COVID-19 crisis thereby enabling continuity of economic activity.

AFI’s work in Africa aligns with the network’s ambition to leave no one behind by building on its 2019 Kigali Statement[4], which calls upon the acceleration of financial inclusion for disadvantaged groups, including the youth.

In this area of crisis policy response and financial inclusion, AFI aims to develop a Special Report on Financial Inclusion Policy Responses to COVID-19 in Africa.

[4] For more information, please visit: https://www.afi-global.org/publications/3091/Kigali-Statement-Accelerati…

5. About the Special Report – Financial Inclusion Policy Responses to COVID-19 in AfricaObjective:

The main objective of the Special Report is to analyse the role, and gauge the effectiveness of, financial inclusion policies implemented in response to the impact and consequences of the COVID-19 pandemic in Africa, in order to support and enable effective peer learning amongst AFI’s policymaker and regulator membership in Africa.
Some specific objectives are:
o Analyse the relevance, effectiveness, and current or potential impact of the financial regulatory policies in mitigatating the negative impact of the COVID-19 pandemic, particularly the most affected and vulnerable groups (such as MSMEs, women, youth, forcibly displaced persons, among others) .
o Provide key information of specific discussions, experiences and learnings by financial regulators on how they are tackling the risks and opportunities that the current epidemic brings in relation to financial inclusion.
o Provide strategic recommendations on effective financial regulatory policies in the current context, envisaging the post-crisis recovery phase (medium and long term)

The analysis should include policies to leverage the potential of digital financial services in the crisis, as well as policies to support the MSME sector. In addition, gender and youth policy considerations should be integrated in this Special Report as cross cutting-themes, along with considerations of the impact on other disadvantaged population segments, as defined by the AFI Network’s “Kigali Statement”.[5]

[5] ‘Kigali Statement: Accelerating Financial Inclusion for Disadvantaged Groups’, AFI (2019), https://www.afi-global.org/publications/3091/Kigali-Statement-Accelerati…

6. Key Deliverables and Activities

The consultant is expected to:
(a) Review the AFI COVID-19 Policy Response (focused on African countries) dashboard and other policy trackers (e.g. IMF, World Bank etc.), available published research on policy response to COVID-19 in Africa, as well as minutes/recordings of AFI’s relevant high-level and technical webinars.
(b) Prepare a literature review summarizing available published material and a provisional Special Report outline, to be agreed with AFI Management Unit.
(c) Conduct phone interviews with approximately 12 AFI members in Africa to capture AFI member experiences in the COVID 19 Policy response envisaging the medium/long term policies during the recovery phase (to be facilitated by AFI). The selection of those countries should maintain a balance within the sub-regions in the African continent.
(d) Conduct phone interviews with approximately 12 key stakeholders (to be agreed with AFI) from e.g. International Organizations and private entities such as such as African Development Bank, the IFC, and Proparco, whose private sector investees across the Continent will benefit from being involved in the dialogue which will inform MSME and DFS enabling policies with the key findings and lessons to be incorporated into the Special Report.
(e) Prepare a draft Special Report synthesizing the findings from the informant interviews with the available published research and information reported by AFI members in the policy trackers and member needs assessment.
(f) Following review of the draft report by AFI Management Unit and any external reviewers identified by AFI, submit a final draft taking account of comments and feedback received, and a comment tracker detailing how comments received have been responded to.

During the consultant’s work on this project, AFI Management Unit will support these deliverable by: providing information of the already implemented initiatives relevant for this study; facilitating contact with AFI’s members for arranging interviews, contributing to the development of interview scripts, and sharing desk research and literature review to support the Special Report preparation.

7. Consultant Experience

• 15+ years of professional experience in financial inclusion policies and programs in the African region.
• Previous solid experience working with Central Banks and other financial regulatory entities.
• Solid experience on development process and post-crisis related issues, specially in the reactivation and development of sustainable livelihoods.
• Solid background providing technical assistance and guidance on financial inclusion for to policymakers focused on youth and women.
• Strong knowledge and understanding of legal and regulatory frameworks related to Digital Finance and MSMEs Finance.

8. Timeline

This work would be undertaken between 1st November 2020 to 31st December 2020. The total envisaged work of the consultant in undertaking these deliverables is envisaged as not more than 40 working days, with all deliverable to be complete by 31 December 2020.
The key timelines are available in the RFP doc.

9. Reporting

Throughout the contract period, the Consultant will report to the AFI Policy Analysis team.

10. Criteria for Evaluation

The proposals submitted will be evaluated based on the following criteria:

1. Academic Qualification;

2. Experience and competence of the key staff for the assignment related;
   • Adequacy for the assignment
   • Regional/Global experience

3. Adequacy of the proposed work plan and methodology in responding to the Terms of Reference
   • Technical approach and Methodology
   • Workplan

4. Sample work – Writing experience and English