African Ministers of Finance, Planning and Economic Development have unanimously called on the Economic Commission for Africa (ECA) and its development partners to spearhead and support efforts that are important for Africa’s economic growth to rebound in the aftermath of the COVID-19 pandemic.
In a statement adopted at the end of the 53rd session of the Economic Commission for Africa’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, such as the Group of 20 Debt Service Suspension Initiative (DSSI) and sovereign debt restructuring, to enhance member States’ access to finance to effectively respond to the pandemic.
The ECA has been advocating for the extension of the DSSI to the end of 2021 at least, to ensure countries have enough liquidity to respond and kick-start recovery by freeing up resources to pay for much-need vaccines and improve their buffers. The liquidity and sustainability facility (LSF) is another important vehicle the ECA and its partners have been working on to assist African countries increase liquidity. The think tank has been a leading advocate for a 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,” read the ministerial statement.
“Five of the six countries in debt distress are African least developed countries and two of the least developed countries have decided to seek debt restructuring under the common framework for debt treatments beyond the Debt Service Suspension Initiative of the Group of 20.”
“We underline the need to revisit the current system of support for the least developed countries in the lead-up to the Fifth United Nations Conference on the Least Developed Countries, in January 2022, with a view to ensuring that international support measures provide the levels of assistance necessary for the African least developed countries and Haiti to break down the structural barriers to advancement that they face and overcome their vulnerabilities.”
In the statement, the ministers recognized that, before the COVID-19 outbreak, Africa had made considerable progress towards social outcomes, with a reduction in poverty levels in most sub regions, but the pace of poverty reduction has been slow, with gross domestic product per capita growth of 0.5 per cent, lower than the previous two decades, and that this growth trajectory, which has currently been stalled or even reversed due to the pandemic, has not been inclusive, with low job creation.