Africa discusses financing post-Covid-19 dev’t
African Heads of State, ministers, leaders of the private sector, development actors and academics will be gathering in Cabo Verde from 2 to 4 December for the African Economic Conference.
This year edition of the conference is focused on “Financing Africa’s post-Covid-19 development.”
Developing new ways of financing the post-Covid-19 recovery and accelerating development in Africa will be the focus of many conversations in this year’s flagship economic event, according to the United Nations Economic Commission for Africa (UNECA).
For three days, African leaders, projects leaders and thinkers will discuss innovative and sustainable options to finance Africa’s post-Covid-19 development. They will reimagine development financing; discuss the reform of Africa’s financial systems to meet development challenges and whether Africa is on the verge of a new debt crisis.
Papers from prominent researchers were selected through an open competition and will provide innovative ideas to mobilize domestic public and private resources in the age of the digital revolution, enhance Africa’s position in the international financial system, review the role of public development banks, explore sustainable finance solutions, regional integration and the role of the global financial safety net; policy options for managing capital flow volatility; financial regulatory reforms and the role of climate risks.
The Covid-19 crisis has exacerbated the pressure on Africa’s development financing challenges by making public finances more strained, debt unsustainable, and foreign direct investment retracting.
Across Africa, the Covid-19 crisis has left more than 30 million people in extreme poverty, living on less than $1.90 a day. To combat the effects of populations plunging into extreme poverty, governments on the continent have announced fiscal stimulus packages ranging in cost from about 0.02 per cent of GDP to about 10.4 per cent of GDP. While these are lifesaving interventions, African governments need significant additional gross financing to respond to these needs in 2022. These gross financing needs exceed the critical threshold of 15 per cent GDP for most countries.
Access to international capital markets, a growing debt financing source for many African countries, has declined as investors’ perception of risks increases. Capital flight from Africa, estimated at over $90 billion since January 2020, and investor risk aversion have caused volatile market movements.