An alliance of public development banks across the globe have emphasized the need for the urgent financing of African economies towards a faster recovery post-Covid-19.
Deliberations were held in a virtual summit dubbed: Finance in Common Spring Meeting, held yesterday, May 11, 2021. The common action by partner organizations involved solidifying cooperation to accelerate investment opportunities across the continent.
Being the host to the summit, the African Development Bank (AfDB) was joined by the African Association of Development Finance Institutions in collaboration with the International Development Finance Club.
Moreover, participants brainstormed about championing collaborative actions. Such actions, they unanimously contended could boost a strong and inclusive recovery in Africa. Precisely so, the recovery pivots on the private sector.
Furthermore, heads of the development banks and international partners proposed innovative financial solutions to assist African financial institutions to promote sustainable development.
Therefore, considering the vast potential of African financial institutions, the proposals aimed at unlocking these potentials to promote sustainable development investments in Africa.
Discussions on the need to accelerate financing
AfDB President Dr. Akinwumi A. Adesina remarked for the opening of the summit:
“As public development banks, we must deepen our ability to reach all parts of Africa. To ensure financial inclusion, especially for the unbanked, and expand access to finance, savings and insurance products and services, we need to work as one unified system.
“Public development banks must strengthen their capacity to deepen domestic capital markets and stock exchanges.”
Dr. Akinwumi A. Adesina, President, African Development Bank
Corroborating these assertions, the chairperson of the International Development Finance Club, Rémy Rioux commented:
“African challenges, more than anywhere else, require us all to go seek coordinated responses and actions. Because in Africa, we need to leave no one behind.
“Let’s Finance in common and build now a common and positive story of innovation and investment in Africa, leveraging ODA and mobilizing all willing stakeholders. The days of pure aid are over.”
Rémy Rioux, Chairperson, International Development Finance Club
Particularly, the AfDB has channelled substantial resources to many sectors since the pandemic began, especially to underserved sectors such as health, social investments, housing, agriculture and climate.
The Bank offered $10 billion Covid-19 Response Facility in mitigating macroeconomic shocks for African countries. It also announced a $3 billion social bond to support its Covid-19 funding efforts.
Meanwhile, the pandemic has thrown African economies into a precarious debt situation. Total external debt on the continent stands at $700 billion. Thus, without a strong resolve to manage this debt, the continent’s economic recovery will suffer.
Dr Akinwumi Adesina surmised, “think of the impact that this debt is having: in 2019, Africa paid $221 billion for debt service, which is 44% of the total government revenue of $501 billion in the same year.”
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