Development experts say the twin malaise of persistent poverty and inequality pose serious threats to the drive to meet prosperity, peace and security in Africa through the sustainable development goals.
The experts warn that unless governments in the continent embark on innovative and people-entered development models they might miss the chance to achieve those goals.
“It is becoming increasingly unlikely that African States will achieve many of the targets set out in the Sustainable Development Goals by the 2030 deadline,” Deputy Executive Secretary and Chief Economist, Economic Commission for Africa (ECA), Hanan Morsy, said.
“Global shocks have wiped out more than two decades of progress the continent had made on poverty reduction. We need sustainable interventions,” he added.
In light of these threats, the ECA hosted a round table discussion at the 55th Conference of African Ministers of Finance, Planning and Economic Development (COM 2023) for experts to brainstorm and recommend actions to help member states lessen their economic and social vulnerabilities and inequalities.
The Governor of the Bank of Mauritius, Harvesh Seegolam, explained that when the COVID-19 pandemic hit in 2020, his country’s tourism sector came to a halt.
To mitigate the impact of the slowdown, he said the government came up with both conventional and unconventional measures to restore normalcy.
Key among these measures, he said, was to make the Mauritius Central Bank an independent institution, capable of initiating and implementing monetary policies to drive the recovery of the sector.
Seegolam said the Mauritius government introduced moratoriums to support targeted sectors; introduced line up credit, and created the Mauritius Investment Cooperation, which operated independently from the central bank, and had independent audits to ensure money invested would benefit the bank.
The main objective of the Mauritius investment cooperation, he said, was to ensure the intervention was profitable and create more wealth for the future generation of the country.
The Ethiopian minister of finance, Ahmed Shide, said Ethiopia, like any other African country, was affected by overlapping shocks – COVID-19, the Ukraine-Russia war, conflicts and drought – adding that the country’s response included a combination of fiscal and monetary policies.
Precautionary measures, he said, were put in place to contain the COVID-19 pandemic, adding that the government postponed personal income tax payment, rescheduled bank loan repayments, gave tax amnesty to different sectors, boosted local food production through the cultivation of more land, and boosted meat production.
The government also embarked on more irrigation activities, and expanded Ethiopian airlines as well as digital payment systems to ease transactions.
The minister of finance and budget for Central African Republic, Hervé Ndoba, said the country has been facing high cost of transport for commodities as a result of fuel scarcity, mainly because it is a landlocked country.
To address these challenges, he said the government created a dry port with warehouses for importers, and put in place custom levies to limit import inflation.
Specifically, he said the government created a custom base to leverage on production costs and adjusted the fuel pump prices.
“We set a target to increase domestic product through community levies. Financial diversification is what we are working on – green funding, blue economy.”
The executive director of the Joint United Nations Programme on HIV/AIDS, Winnie Byanyima, said the biggest challenge for Africa was access to financial services.
Even before the COVID-19 crisis, war in Ukraine, she noted that countries were borrowing at an interest rate of over 8 percent, while the high income countries borrowed at rates as low as one percent.
The high cost of borrowing, she pointed out, was taking away Africa’s prospects of achieving SDGs.
Also, the challenge of not being able to borrow in countries’ own currency was a pointer to how countries were being treated unequally on matters of access to affordable finances.
Discussion on financing for Africa, she insisted, was important as we approach the SDG summit in September, adding that there was need for countries to tackle the high cost of debts, connect financing with SDG achievement, and push harder for Africa to have a seat at the G20 forum.
Acting Executive Secretary of the Economic Commission for Africa (ECA), Antonio Pedro, said Africa was falling further behind other global regions and now accounts for the largest share of the world’s poor due to increased poverty and inequalities.
As a result, Pedro said many African countries were facing declining revenues, rising debt stress and constrained fiscal space, all of which limit their capacity to respond to economic crises
He said partnerships were key in addressing the African challenges.
“During the pandemic ECA worked with finance minister to find solutions to counter the effects of the pandemic in their respective sector, helped African countries access vaccines for its citizen,” Pedro noted.