Monday, June 17, 2024
spot_img
spot_img
spot_img
spot_img
spot_img
spot_img

African experts call for unity, regional integration to drive financial reforms                                                                                 

Share

By our staff reporter

African finance and economic experts are urging African leaders attending the African Union summit to take decisive action and prioritize regional integration initiatives, emphasizing the importance of unity. These measures are critical for the continent to effectively advocate for debt reforms and a restructuring of the global financial system.

During the African Union summit in Addis Ababa, experts highlighted the financial challenges faced by over thirty African countries, primarily due to structural barriers that keep the continent at a disadvantage in global value chains.

Jason Braganza, the Executive Director of the African Forum and Network on Debt and Development (AFRODAD), explained that Africa’s heavy reliance on exporting raw commodities and importing finished goods leads to liquidity shortages, resulting in the need for loans. He emphasized the necessity for Africa to adopt a coherent and coordinated approach that highlights the continent’s value as a net creditor in global trade and commerce to address these structural deficiencies.

Mavis Owusu-Gyamfi, Vice President of the African Center for Economic Transformation (ACET), called for a global financial architecture that recognizes and responds to Africa’s current realities and complex challenges. She highlighted that the current international financial systems were established 80 years ago when most African countries were colonized, effectively preventing their industrialization. Given Africa’s significant contribution as a provider of natural resources, Owusu-Gyamfi argued for an increased and equitable allocation of resources through mechanisms such as International Development Assistance (IDA) and Special Drawing Rights (SDRs).

Hannah Ryder, CEO of Development Reimagined, emphasized that Africa still requires substantial support from the rest of the world. While domestic efforts and new lenders like China and private sector actors have brought in resources, Ryder explained that in the 1980s, African governments realized their aspirations, such as infrastructure development, couldn’t be solely met with domestic resources. She highlighted the adverse impacts of colonization and other factors that have severely impacted African economies. Studies conducted by Development Reimagined across 13 African countries indicated that to achieve Agenda 2063 aspirations and the Sustainable Development Goals (SDGs), these countries would require annual funding of USD 100-150 billion. However, relying solely on external finance under the current system would lead to unsustainable debt levels within a few years. Ryder argued that the global financial architecture, initially designed to serve major powers, needs to be overhauled to address the needs of Africa and developing countries.

Patrick Ndzana Olomo, Acting Head of the economic policy and research division at the Department of Economic Affairs of the African Union Commission, highlighted Africa’s admission to the G20 as an opportunity to establish comprehensive frameworks that combat illicit financial flows, which cost the continent USD 90 billion annually. Olomo stressed the importance of Africa’s participation in the G20 to address strategic issues that benefit the continent’s interests.

Read more