Africa’s economic recovery from the combined brunt of the ongoing COVID-19 pandemic and the Ukraine crisis took center stage at ongoing Africa’s flagship economic development conference.
The 54th session of the Conference of African Ministers of Finance, Planning and Economic Development (CoM2022), Africa’s flagship economic conference, is underway in a hybrid format in Dakar, Senegal, and virtually from May 11 to 17.
Experts, who had a meeting from May 11 to 13 to set the tone for the ministerial session slated for May 16 to 17, urged African countries to explore creative ways to finance the continent’s recovery.
UN Under-Secretary-General and Executive Secretary of the UNECA Vera Songwe said Africa had a unique opportunity to do things differently as she urged participants to share their experiences and ideas to “break the cycle of solely donor contributed aid” in Africa.
Songwe stated that Africa’s growth must be “great, sustainable and inclusive” as she emphasized growth linked intrinsically to commodity prices “cannot be the growth of the future.”
“As we look at the gains we have made in the last decade and the gains that have been taken away by the Ukraine crisis, we can rethink what kind of growth Africa can have,” a UNECA statement quoted Songwe as saying.
“We must do this as a continent, not as individual countries.” The continental gathering brought together seasoned and high-level participants from governments, academia, the private sector, as well as central bank governors from within and outside the continent, according to the UNECA statement.
Participants of the meeting emphasized that Africa’s recovery from the pandemic and the Ukraine crisis should be environmentally sustainable by prioritizing green recovery solutions. They also called for the full operationalization of the Africa Continental Free Trade Area (AfCFTA) Agreement.
They reckoned that the historic continental free trade pact would boost trade and investment among African countries, eventually helping countries to easily rebound from the economic contraction caused by ongoing uncertainties.
The theme for CoM2022 — Financing Africa’s recovery: breaking new ground — was influenced by the fact that development financing gaps have widened significantly since the outbreak of the COVID-19 pandemic, according to the organizers.
For Africa, the International Monetary Fund (IMF) estimated that annual expenditures related to the sustainable development goals will rise by 154 billion U.S. dollars annually due to the pandemic; and an additional 285 billion U.S. dollars for the next five years to ensure an adequate response to the pandemic.
Deputy Executive Secretary of the UNECA Hanan Morsy emphasized that a combination of efforts at national, continental and global levels are needed to respond to the shocks endured by Africa in the wake of the COVID-19 pandemic and the ongoing Russia-Ukraine conflict.
While underscoring that the African continent was hit with a trifecta of shocks in food, fuel and finance, Morsy said Africa had huge development financing needs even before the pandemic. In terms of infrastructure, it is estimated that the continent needed 150 billion U.S. dollars to 170 billion U.S. dollars a year. For education, Africa had a financing gap of 39 billion U.S. dollars a year. The continent also needs 3 to 5 percent of its GDP to finance climate action. “These were complicated by the pandemic,” Morsy explained.
According to the UNECA, among other global financing dynamics, higher inflation in Europe and elsewhere has increased external borrowing costs for African countries and raised the risks of capital reversal. When the crisis started in Ukraine, the slow and steady recovery being made by Africa was put to another test, the UNECA said.
Noting that African households spend an average of 42 percent of expenditure on food, the UNECA said shocks induced by the Ukraine crisis hurt the most vulnerable in Africa. In addition to the experts’ meeting and the ministerial segment, the CoM2022 will feature a number of side events on May 14 and 15 to address issues relating to health, infrastructure, education, climate action, and resource mobilization in support of an inclusive and sustainable recovery for African countries, according to the UNECA statement.
The annual Conference of African Ministers of Finance, Planning and Economic Development (CoM) is Africa’s flagship annual economic event that serves as an important platform for African ministers as well as experts from around the world to have in-depth discussions on current issues and future implications that are of relevance to the continent’s economic development.