By Mariama Marong
United Nations Economic Commission for Africa (UNECA) on Tuesday April 19th 2022, held a pre-conference for the upcoming Conference of Africa’s Finance Ministers (COM2022) to be held in May in the Senegalese capital Dakar, under the theme “Financing Africa’s recovery and breaking new ground.”
The virtual COM2022 dialogue of Africa’s Finance Ministers is organised by the UN’s sub-Regional Office for West Africa, and as the 54th session, the Conference of Africa’s Finance Ministers is motivated by the growing challenges of financing Africa’s recovery from the Covid-19 pandemic, which has been brought to bear and exacerbated gaps in several sectors including health, education, infrastructure, and agriculture.
Speaking at the virtual meeting, Ms. Hanan Morsy, Deputy Executive Secretary and Chief Economist of UNECA, said more than 650 million households do not have access to energy and only 39% of the population has access to the internet, with a national road network density largely below world standards of 204 km of roads per 1000 km², compared to the average of 944 km per 1,000 km². She said in West Africa, less than 18% of the national road network was paved in 2017.
“More insights into Africa and West Africa’s magnificent financial needs will be presented. However, it is worthy to note the difficult fiscal situation in which Africa has found itself after almost a decade of growth. Indeed in 2019, many African countries registered between 4% to 5% GDP growth along with low debt rates. The immediate need to respond to Covid-19 multiple negative effects has resulted in a fiscal deficit of 7.6% of GDP in 2020, compared to 3.5% in 2019, and the debt ratio has increased on average by 11 percentage points, to reach 71.1% of GDP in 2020,” Ms. Morsy explained.
She highlighted that the macro-economic situation of West African countries has been further exacerbated by the sudden Ukraine-Russia War, which she said, has disrupted food and energy supply chains leading to steady inflation in Africa and the world at large.
The Deputy Executive Secretary of ECA said in response to this new shock, Governments need to put in place social safety nets and social security policies and measures for the most vulnerable households and businesses, which are already financially exhausted by the effects of the Covid-19 pandemic. She said those measures will add more pressure to those countries’ already experiencing a shrinking fiscal space.
Ms. Morsy said the West Africa region and the Sahel face specific development challenges along with important financing needs that require specific and innovative financing modalities. She urged African leaders to reflect and come up with innovative policy recommendations that will fit into the deliberations of the 54th Session of the Conference of Africa’s Finance Ministers.
Alagie Fadera, president of the Bureau of the 24th Session’s Inter-governmental Committee of high officials and experts in West Africa (ICE24th), said Covid-19 has affected all sectors of the economy in the sub-region and the continent at large, adding the Gambia has a new formulating recovery plan to recover the Gambian economy through tax and revenue collection. He said there is a need for West African countries to recover their economy through domestic financing which he noted, is very pertinent in breaking new ground.
“This, if taken into consideration, can domesticate the recovery of our economy,” he said, reiterating that this can help widen the tax system by creating innovative ways in bringing formal and informal sectors to leverage public/private financing. He noted that tax can serve as an expansion of the financing needs of a country.
Fadera said the upcoming meeting of Africa’s Finance Ministers will be crucial in the recovery of Africa’s economy and that it will help mitigate challenges that Governments have, regarding their recovery plans.
Ngone Diop Director Sub Regional Office for West Africa ECA the Economic Commission for Africa said the continent has more challenges when it comes to debts and there is an urgent need to address these challenges that the sub-region is confronted with.
She said the continent faces problems of unemployment and this calls for the urgent need of creating a conducive environment necessary for job creation and the smooth running of businesses as well.