Africa to develop new ways of financing post COVID-19 recovery

African experts and policymakers are set to outline new ways of financing Africa’s post-COVID-19 recovery and accelerating development in the upcoming African Economic Conference, the United Nations Economic Commission for Africa (UNECA) said Wednesday.

The African Economic Conference, Africa’s flagship economic event, slated to be held from December 2 to 4, bringing together African heads of states, ministers, leaders of the private sector, development actors and academics in Cape Verde, the UNECA announced on Wednesday. 

According to the UNECA, for three days, African leaders, project leaders and thinkers will discuss innovative and sustainable options to finance Africa’s post-COVID-19 development. 

African policymakers and experts “will reimagine development financing, discuss the reform of Africa’s financial systems to meet development challenges and whether Africa is on the verge of a new debt crisis,” the UNECA said.

The UNECA argued that the COVID-19 crisis has exacerbated the pressure on Africa’s development financing challenges by making public finances more strained, debt unsustainable, and foreign direct investment retracting. 

Figures from the UNECA show that across Africa, the COVID-19 pandemic has left more than 30 million people in extreme poverty, living on less than 1.90 U.S. dollars a day. 

African governments, in a bid to combat the effects of populations plunging into extreme poverty, have announced fiscal stimulus packages ranging in cost from about 0.02 percent of GDP to about 10.4 percent of Gross Domestic Product (GDP). 

It further stressed that the supply and demand shock caused by the COVID-19 pandemic directly impacted the revenues of many African governments through reduced exports earnings and lower domestic tax revenues. 

“While these are lifesaving interventions, African governments need significant additional gross financing to respond to these needs in 2022,” the UNECA said, noting that the gross financing needs exceed the critical threshold of 15 percent GDP for most countries. 

During the upcoming conference, papers from prominent researchers are expected to provide innovative ideas to mobilise domestic public and private resources in the age of the digital revolution, enhance Africa’s position in the international financial system, review the role of public development banks, explore sustainable finance solutions, regional integration and the role of the global financial safety net, it was noted.  -Xinhua

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