President Nana Addo Dankwa Akufo-Addo on Tuesday urged the global community to increase its efforts to help African countries safeguard their economies from the devastations caused by the COVID-17 pandemic.
In a keynote address at the 15th Edition of the European Development Days (EDD) in Brussels, Belgium, the President said African countries have had their economies further worsened by the Russian/Ukrainian conflict.
“The World Bank…tells us that, after the conflict, the number of poor people in sub-Saharan African countries would rise from 413 million to 463 million this year, an increase of 50 million persons,” he stressed.
Amid these difficulties, President Akufo-Addo said 18 African economies have experienced credit downgrades, even when all economies were suffering adverse fallouts from last year’s pandemic, and “we, in Africa, are also facing the risk of so-called ‘taper-tantrums’, as investors exit our markets, thereby exacerbating the increasing cost of borrowing.”
President Akufo-Addo said an amount of 650 billion Special Drawing Rights (SDR), which was approved for the IMF in August 2021, meant to provide significant relief, had seen Africa receiving only US$33 billion (about 5 per cent).
More importantly, he said, the promise to reallocate some US$100 billion of the SDR to African economies, agreed on at the Paris Summit in May 2019, had so far yielded about US$36 billion in pledges as of April 2022.
President Akufo-Addo said the issue of “African Risk Premium”, which increases the cost of borrowing by African countries from the market, must be addressed, “especially as Africa provides the highest return on investments anywhere, and has a good record of debt repayment.”
The President said the combined effects of the debt situation, rising interest rates and rising cost of living had resulted in severe macroeconomic and financial instability in African countries, adding that “what is clear is that the ensuing damage cannot be cured so easily with the limited fiscal tools at our disposal and national policy adjustments.”
President Akufo-Addo also touched on the relationship that exists between Africa and Europe, which, he said, should be the catalyst to further ensure that Africa gets the needed assistance, especially in these trying times.
According to him, the long-standing relationship between Africa and Europe, founded on ties of blood, culture, geography and history, should serve as a platform for enhanced cooperation between the two continents.
He said issues of peace, progress and prosperity in Africa and Europe were deeply intertwined, which pre-supposed that ensuring the development of Africa should be a common interest.
“Now more than ever, a strong partnership between Europe and Africa, reinforced political dialogue, and expanded cooperation in the fields of economic growth and international security are required,” he said.
President Akufo-Addo said, “We have to work together to achieve our goals, including a fair, equitable process of energy transition, which recognizes that the entire African continent is responsible for less than four per cent of global emissions and which safeguards the prospects of Africa’s development.”
It is for these reasons, according to the President, that the establishment of the €300 billion Global Gateway package by the European Union, which aims to boost public and private investment in infrastructure, energy and a green transition, digital transformation, growth and jobs, transport and human development over the next seven years, is very much welcomed.
President Akufo-Addo emphasised that the package must be innovative in its approaches to infrastructure investments and financing, and should be characterised by demand-driven projects, which deliver on African-defined priorities.
He expressed hope that the series of high-level panel sessions and debates, framed around the five key investment areas of Global Gateway (digital, climate and energy, transport, health, education and research), will produce outcomes that would prove beneficial in the successful implementation of infrastructural developments across Africa.
“In the next few years, we must be able to see tangible projects across Africa as proof of the fruits of the strategic partnership that exists between Africa and Europe. Excellent relations between Europe and Africa are essential to global security in this 21st century, which should lead us onto the path of shared progress and prosperity”, he concluded.
Rex Mainoo Yeboah, ISD