Global system reform will help Africa

Shrinking fiscal space presents the single biggest issue affecting African finance ministers’ ability to meet development obligations, says the Executive Secretary of the Economic Commission for Africa, Claver Gatete.


This article is sponsored by UN ECA

Speaking at the official opening of the Ministerial Segment of the 56th Session of the ECA Conference of African Ministers of Finance, Planning and Economic Development,  Gatete said with 2.7% growth in 2023, and a projection of 2.4% in 2024, inflation at nearly 20% and 21 countries at risk of, or already in, debt distress, the future seems bleak.

But all was not lost, he said, proposing a cocktail of solutions to help the continent navigate the restricted fiscal space.

“First, the global financial architecture needs to be fixed. It must work for everyone and reflect the new dynamics. In this regard, we welcome the membership of the African Union in the G20. But we need to go further!

“Second, we must address the issue of unfair risk perceptions and credit ratings that offer Africa limited borrowing options. We should not accept that only two African countries have investment grade rating, and 22 countries are unrated.”

He also urged more proactive domestic resource mobilization, reform of tax systems, investment in capital market development, and establishment of a productive green finance system in Africa with “the potential to generate $3 trillion by 2030”.

Earlier, African Union Commission Deputy Chairperson, Monique Nsanzabaganwa, called for Africa’s voice to be amplified on the global stage.

“We must also enhance the participation of ministers of finance, planning and economic development in the AU’s governance structures and implementing agencies,” she added.

Among other priorities, she said there was need to capacitate structures that advanced the development agenda. These include the African Central Bank, the African Monetary Fund, the African Investment Bank and the African Stock Exchange.

Ambassador Rebecca Otengo, the Outgoing Chairperson of the Ministerial Bureau, highlighted the importance of “structural reforms to revive growth, enhance resilience, and optimise fiscal monetary policies”.

The official opening session started with Mr Richard Moyo, who is the Minister of Provincial Affairs and Devolution of the host province of Matabeleland North, welcoming delegates to the tourist city of Victoria Falls.