Finance and economic experts from Africa have called on Africa leaders at the AU 37th summit to match unity speak with actions and step up regional integration efforts as these are key to the continent’s agency and success in the push for debt reforms and an overhaul of the global financial architecture.
Speaking on the sidelines of the African Union summit in Addis Ababa Ethiopia where Africa heads of states will convene over the weekend, the experts noted that over 30 countries in Africa are in debt distress largely due to structural traps that keep the continent locked at the bottom of the value chains.
“The Continent is largely an exporter of raw commodities and importer of finished goods, and this means we will always be in a liquidity crunch and cash shortfall. This necessitates having to go for loans,” said Jason Braganza the Executive Director of African Forum and Network on Debt and Development (AFRODAD). He said the only way to address these structural deficiencies would be for Africa to have a coherent and coordinated approach that underscores the value that the continent brings to global trade and commerce as a net creditor to the world.
Mavis Owusu-Gyamfi, Vice President of the African Center for Economic Transformation (ACET) called for a global financial architecture that is responsive to Africa’s current realities and complex challenges. “The international financial systems were set up 80 years ago when most African countries were colonised, and the system locked them out of industrialisation. Given what Africa has given to the world as a provider of natural resource capital, it is not too much to ask for an increase and a fair share of allocations through public goods such as the International Development Assistance (IDA) and the Special Drawing Rights (SDRs).”
Hannah Ryder, CEO, Development Reimagined said that Africa still needs a lot from the rest of the world. “While a lot is being done domestically and new lenders such as China and private sector actors have brought in resources, we have to go back to the 1980s when African governments realised that their aspirations such as infrastructure building would not be met by domestic resources only. Their economies had been effectively decimated by colonisation among other factors. At Development Re-imagined, analyses from studies across multiple reports looking at 13 countries in Africa showed that for these countries to meet Agenda 2063 aspirations and the SDG targets, these countries would need between USD100-150 billion per year. If they were to do that through external finance the way it works at the moment, they would be crashing their debt sustainability thresholds within a few years, and many countries have done so. The global financial architecture, which was initially set up to serve major powers, needs to be overhauled if they are to respond to the needs of Africa and developing countries.”
Dr. Patrick Ndzana Olomo, Acting Head of the economic policy and research division at the Department of Economic Affairs of the African Union Commission said, “Africa’s admission to the G20 is an opportunity to build comprehensive frameworks within the G20 to stem illicit financial flows that see the continent lose USD90 billion a year. It is extremely important for Africa to go to the G20 to discuss the strategic issues that are pertinent and that serve the interests of the continent.”
The experts spoke at a media briefing event convened by African Forum and Network on Debt and Development (AFRODAD) and Christian Aid. The session was moderated by Joab Okanda, Senior Advocacy Advisor at Christian Aid.
ENDS.
Notes to editors:
The recording can be accessed here.
