African Ministers of Finance, Planning and Economic Development have called on the Economic Commission for Africa (ECA) and development partners to support efforts for a rebound of Africa’s economic growth post-COVID-19 pandemic.
In a statement adopted at the end of the 53rd Session of the Economic Commission for Africa’s Conference of African Ministers of Finance, Planning and Economic Development, the Ministers commended the ECA and its partners for the platform to discuss several debt initiatives, such as the Group of 20 Debt Service Suspension Initiative (DSSI) and sovereign debt restructuring, to enhance member States’ access to finance to effectively respond to the pandemic.
The ECA has been advocating for the extension of the DSSI to the end of 2021 to ensure countries have enough liquidity to respond and kick-start recovery by freeing up resources to pay for much-need vaccines and improve their buffers.
The liquidity and sustainability facility (LSF) is another important vehicle the ECA and its partners have been working on to assist African countries to increase liquidity.
The think tank has been a leading advocate for new issuance and re-allocation of Special Drawing Rights (SDRs) to low and middle-income countries.
“We express particular concern that the COVID-19 pandemic could heighten debt vulnerabilities of African least developed countries,” the statement said.
“Five of the six countries in debt distress are African least developed countries and two of the least developed countries have decided to seek debt restructuring under the common framework for debt treatments beyond the Debt Service Suspension Initiative of the Group of 20.”
“We underline the need to revisit the current system of support for the least developed countries in the lead-up to the Fifth United Nations Conference on the Least Developed Countries, in January 2022, with a view to ensuring that international support measures provide the levels of assistance necessary for the African least developed countries and Haiti to break down the structural barriers to advancement that they face and overcome their vulnerabilities.”
The Ministers recognised that before the COVID-19 outbreak, Africa had made considerable progress towards social outcomes with a reduction in poverty levels in most sub-regions.
However, the pace of poverty reduction has been slow with gross domestic product per capita growth of 0.5 per cent, lower than the previous two decades.
That this growth trajectory, which has currently been stalled or even reversed due to the pandemic, has not been inclusive with low job creation.
The Ministers said industrialisation was arguably the only proven path to sustainable economic growth and development.
“We take note of the opportunities that the COVID-19 pandemic has provided to strengthen policies and build forward better through an industrialisation pathway that is environmentally sustainable and digitally empowered,” they said.
The African Ministers said despite the pick-up in economic growth to 2.9 per cent in 2019 compared with 2.7 per cent in 2018, the coronavirus pandemic significantly affected African growth in 2020 with an estimated 5.4 per cent decline in gross domestic product growth rate.
This harmed social development, induced severe challenges for African countries to achieve the sustainable development goals and goals of Agenda 2063.
“The pandemic has caused challenges and possible risks and uncertainties to the medium-term outlook, particularly as a result of low economic activity due to lockdowns to combat the pandemic, the threat from climate change, the global economic slowdown and the vulnerabilities exposed by COVID-19,” the Ministers said.
The Ministers recognised the importance of aligning industrial policies with other sectoral policies, promoting local consumption and production, participation in regional and global value chains, and capitalising on the benefits of the AfCFTA to stimulate the industrialisation of the continent.