The crisis looms – 4 steps to meet Africa’s urgent financial needs
African countries are facing an onslaught of crises and need to adapt quickly.
COVID-19, climate change, conflict, and Russia’s war in Ukraine have caused severe setbacks in food, fuel, debt, and liquidity with no signs of slowing down.
In his June 2022 Global Economic Outlook (GEP) report for the World Bank, the global economy is experiencing years of slow growth.
Rising prices, with destabilizing consequences for lower and middle-income countries. I predict that it is possible.
1) Ensuring a fair distribution of Special Drawing Rights
African countries urgently need new liquidity that the IMF’s Special Drawing Rights (SDRs) can provide quickly.
This is a potential right to the freely usable currency of an IMF member country that can provide liquidity to the country.
This liquidity is essential for African governments to build and sustain basic social protection programs in the face of rising food and fuel costs.
2) Fix a broken debt management system
As of the end of May 2022, 23 African countries were either seriously threatened or already in a debt crisis.
The situation is aggravated by rising interest rates and Russia’s war in Ukraine.
3) Debt relief must be swift, comprehensive, and broad.
To facilitate debt settlement, the G20 called on creditors to come together under a common framework.
Scaling up Africa’s climate finance to advance global solutions
Despite contributing just 3.8% of her global emissions, Africa has been bearing the brunt of climate change.
Africa is losing $7 billion to $15 billion from her each year to climate change, and that amount is expected to reach $50 billion by 2040.
In Africa, climate finance inadequacies, unmet climate finance costs, and neglected carbon markets require immediate attention.
4) Rebuild trust and create a new global partnership for Africa
This year is an important year. Africa’s voice and collective position must be articulated on major global decision-making platforms.
Such actions will not only drive reforms in the global financial architecture to ultimately better serve Africa.
But also provide an opportunity to restore and rebuild confidence in international dialogue and action.
Then Africa can become a continent that actively contributes to shaping global solutions.
Thoughts?
