Prior to COVID-19, economists estimated that African countries would need US$200-billion per year to reach SDGs - this has risen to US$354-billion annually.

Despite an estimated growth rate of 3.6%, Africa needs high levels of financing - for structural transformation and to achieve the 2030 Agenda for Sustainable Development. Before the COVID-19 pandemic, economists estimated that African countries would need US$200-billion per year to reach their Sustainable Development Goals. Now this has risen to US$354-billion annually.

This is one of the key takeaways from the 54th session of the Conference of Ministers (CoM2022) in Senegal, under the auspices of the United Nations Economic Commission for Africa (ECA) and under the theme “Financing Africa’s Recovery: Breaking New Ground”.

Speaking at the opening session Michel Camdessus, Former Managing Director of the IMF and former governor of the Banque de France, agreed that reform of the global financial architecture was “crucial for Africa”.

He said the Bretton Woods system needed renegotiation “most urgently”, adding that it was impossible to “dream of a radiant future for the planet” if this dream left out Africa and its youth.

President of Senegal, Macky Sall said a complete overhaul was required. It was the responsibility of African ministers present, he said, to call for a new global financial architecture that would better serve Africa.

He added that COVID-19 had shown that existing financial instruments weren’t working for countries which needed them the most. Africa “needs money, but we can’t get it. It’s like a COVID patient who needs oxygen but is told ‘we have the oxygen but can’t give it you because we don’t have the instruments.”

Attack on health, economy

Vera Songwe, UN Under-Secretary-General and Executive Secretary of the ECA, said the pandemic had come as an “attack” not just on health but on the economy. African countries have been at war for three years, she said, “war with time, COVID, climate change, terrorism and the war on bad governance”. So, finding innovative financing solutions was the need of the hour, because “we are looking not just for survival, but for prosperity”.

Both were speaking against the backdrop of the double blow of the pandemic and the war in Ukraine, which are compounding already urgent financing challenges in Africa.

According to the ECA, an additional US$285-billion is needed over the next five years to ensure an adequate response to pandemic. Estimated growth is 0.4% lower than previously predicted, because of the Ukraine crisis. 55 million more Africans have slipped into poverty and there is a high risk of debt distress in many African countries.

While pointing out that the ECA was playing a large part in advocating for an overhaul of the global financial architecture, Songwe insisted Africa also needed to look within - to increase and strengthen its domestic resource mobilisation and improve on governance.

Among the proposals discussed was Africa gaining more of a voice by having a permanent seat at the G20, a point emphasised passionately by Rebecca Grynspan, Secretary General, UNCTAD. S

Grynspahe said Africa was “suffering” despite having done nothing wrong. Extending the World Bank’s Debt Suspension Service Initiative (DSSI), which helped the poorest countries during the pandemic, and “orderly and rational” debt instruments were part of the solution, she said.

The ECA added that the African Continental Free Trade Area (AfCFTA) was described as a potential game-changer, with its demonstrated capacity to pool countries into a single market, as happened with the creation of the African Medical Supplies Platform (AMSP) and the ECA-led Pharma Initiative.

At the opening session, the Director General of the World Trade Organisation, Ngozi Okonjo Iweala, made a case for global trade to be seen as a crucial requirement for equitable and sustainable growth.

She said the pandemic and war in Ukraine had caused countries to believe that globalisation was “passe”, but she said trade was vital to moving goods and funds from areas of plenty to areas where there was a deficit.

Songwe added that ministers gathered at CoM2022 could provide Africa with a unique opportunity to generate more authentic solutions to implement on the continent. She said when the history of Africa is written, “we will look back at the past three years and say African ministers of finance and economic development have succeeded”, along with the governors of central banks, in making Africa resilient and prosperous.