African Ministers of Finance have unanimously called on the ECA and its development partners to continue to support the continent’s recovery efforts. According to the ministers, this is vital for Africa’s economic growth to rebound from the COVID-19 pandemic.
The Ministers made this call in a statement adopted at the end of the 53rd session of the ECA’s Conference of African Ministers of Finance, Planning and Economic Development.
The ministers commended the ECA and its partners for providing African countries with a platform to discuss several debt initiatives. Some of these initiatives include the Group of 20 Debt Service Suspension Initiative (DSSI) and sovereign debt restructuring. These initiatives enhance member States’ access to finance to effectively respond to the pandemic.
Extension of Service Suspension Initiative
The Economic Commission for Africa (ECA) is an advocator for the extension of the DSSI to at least the end of 2021. This will ensure that countries have enough liquidity to respond to their needs. Also, the extension will help kick-start recovery by freeing up resources to pay for much-need vaccines and improve their buffers. finance finance finance
Moreover, the liquidity and sustainability facility (LSF) is another important vehicle the ECA and its partners employ to assist African countries to increase liquidity. The ECA is an 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. Five of the six countries in debt distress are African least developed countries. We underline the need to revisit the current system of support for the least developed countries “
Ministerial statement.
Also, the Ministers noted that two of the least developed countries (LDCs) have decided to seek a debt restructuring. This is under the common framework for debt treatments beyond the Debt Service Suspension Initiative of the Group of 20.
Impact of COVID-19 on the continent
In the statement, the ministers recognized that, before the COVID-19 outbreak, Africa had made considerable progress towards social outcomes. This according to them, resulted in a reduction in poverty levels in most sub-regions. Yet, the outbreak of the pandemic has slowed the pace of poverty reduction.
According to ministers, despite the pick-up in the economic growth of 2.9% in 2019, COVID-19 has caused the growth in the continent to contract by 5.4%. They added that the pandemic also harmed social development.
They also recognize the role played by digital technologies in transforming the industry through what is referred to as the fourth industrial revolution. This includes the adoption of technologies such as industrial robots and three-dimensional printing in manufacturing. Others include the use of big data and artificial intelligence in product development and e-commerce in marketing and sales.
Budding back better from the pandemic
During the two-day conference, the ministers deliberated on the theme “Africa’s sustainable industrialization and diversification in the digital era in the context of COVID-19”.
They indicated that industrialization was arguably the only historically proven path to sustainable economic growth and development; underpinned by stronger industrialized economies.
“We take note of the opportunities that the COVID-19 pandemic has provided to strengthen policies and build forward better”.
The ministers recognized the importance of aligning industrial policies with other relevant sectoral policies, as well as promoting local consumption and production. They also called for participation in regional and global value chains. The ministers urged countries to capitalize on the benefits of the AfCFTA to stimulate industrialization in the continent.
More importantly, the ministers called for an inclusive industrialization and economic diversification strategy and a well-linked informal sector. They also highlighted the need for Africa to continue adopting evidence-based policymaking processes through quality data.
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