Noting that Africa was “facing a perfect storm of overlapping and recurring crises” of the COVID-19 pandemic, the war in Ukraine and climate change,” Ms. Morsy said that these crises have exacerbated poverty and inequality, which were already significant before the pandemic.
“There is an urgent need to foster a development model centered around people and to mainstream poverty and inequality into national and regional development strategies,” Ms. Morsy said in a presentation introducing the theme, “Fostering recovery and transformation in Africa to reduce inequalities and vulnerabilities” of the 55th Session of the Conference of African Ministers of Finance, Planning and Economic Development whose ministerial segment opens in Addis Ababa, Ethiopia next week.
The session stressed that African countries should pursue pro-poor and inclusive macroeconomic policies and carve a just structural development path that meets people’s needs, underpinned by the benefits of industrialization and the African Continental Free Trade Area (AfCFTA).
Africa has a growing number of people living in poverty and this has been worsened by high inequalities on the continent and there is a growing need to increase resources to bring about long-term inclusive recovery. Among the issues on the table during the Conference are approaches to finance the recovery including the need for fair taxes and leveraging climate finance.
Growth does not guarantee inclusion, we have seen growth without sufficient emphasis on inequality and poverty, said Ms. Morsy calling for a policy shift in tackling these social challenges.
Reforming the global financial system could allow countries to access affordable long-term financing, with better lending terms. Furthermore, multilateral development banks can expand the volume of lending (including concessional lending) for countries struggling with high debt and high cost of financing. She stressed the need to reform the rechanneling of Special Drawing Rights (SDRS) to promote greater utilization and in a rule based, analytical manner, said Morsey.
Calls to accelerate the implementation of AfCFTA have reverberated throughout the meeting, as it is a powerful lever for poverty reduction, it cuts across all economic sectors and presents a new pathway for broad-based growth. Furthermore, the AfCFTA can unlock green investments and digital transformation.
Africa’s economic growth is set to rebound at 3.9% and inflation has been reduced to 12% so far. It is urgent that Africa moves towards a new cycle of sustainable growth and a creates a climate with reinvigorated business and innovation. This ECA notes, will need attention to macroeconomic fundamentals and structural transformation.