African countries should institute wide-ranging fiscal reforms to expedite sustainable recovery from multiple crises which have hindered industrialization and economic diversification, the Economic Commission for Africa’s (ECA) Acting Executive Secretary, Antonio Pedro, has urged.
“Ensuring a sustainable recovery, which protects populations and economies from the shocks of future pandemics and other crises, will require a range of reforms and initiatives at both the national and international levels,” said Mr. Pedro in his remarks at the 2023 Coordination Segment of the Economic and Social Council (ECOSOC) on 2 February in New York City.
Mr. Pedro highlighted that Africa’s recovery efforts have been undermined by the ongoing war in Ukraine, tightening international financial conditions and the climate crisis.
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“For African countries, appropriate policy choices through fiscal reforms as well as building coherent and effective frameworks for mobilizing domestic revenue are needed,” Mr. Pedro said, calling for a reprioritisation of public expenditure to invest in more growth-enhancing projects.
He noted that the COVID-19 pandemic has led to the largest drop in Africa’s growth rate since World War II, and pushed more than 55 million Africans into extreme poverty.
The UN official pointed out that the Ukraine War has contributed to double digit inflation in nearly half of African countries, which are also battling stretched budgets, rising debt servicing costs and constrained market for new finance.
“At the current pace, we are starting to see a reversal of much of the progress made towards achieving Agenda 2030 and Agenda 2063,” Mr Pedro noted.
Currently, nine African countries are in debt distress and an additional 13 are at high risk of falling into debt distress, necessitating the urgency to reform the G20 Common Framework to make it a more effective process for multilateral debt restructurings, he urged.
Calling for a simplified process of rechanneling Special Drawing Rights to developing countries and the honouring of pledges, Mr. Pedro urged African Multilateral Development Banks to help in de-risking investments on the continent to reduce its dependence on the rest of the world.
Optimistic that a recovery, which leverages the human and economic potential on the African continent, was possible, Mr. Pedro cited that such recovery starts with jobs and skills. In addition, an inclusive and resilient recovery needs must be underpinned by green and equitable growth while ensuring a just energy transition to achieve the fundamental goal of access to electricity for all on the continent.
“We have 500 million Africans that have no access to electricity, and this must change,” Mr. Pedro emphasized, urging Africa to tap its natural endowments to localize strategic value chains such as the development of batteries and electric vehicles ,and renewable energy, including solar and wind.
Besides, Africa needs to operationalize local content policies and national suppliers’ development programmes to accelerate the emergence of globally competitive SMEs and expand the job market.
Mr. Pedro said the full implementation of the African Continental Free Trade Area (AfCFTA) Agreement would generate the fundamentals for Africa’s recovery because of the large market of 1.3 billion people that the free trade area offers. The ECA is working with Regional Economic Communities to formulate relevant strategies for the implementation of the AfCFTA and climate action.
Mr. Pedro highlighted that through the Africa Regional Collaborative Platform, the ECA has worked with various partners in building an African narrative and content for COP27 at which Africa had a strong presence. He stressed the opportunity of developing carbon credit markets in Africa.
“Our target is that if we succeed in selling carbon that is sequestered at $120/t, then we will be generating about $82 billion a year in additional revenue,” Mr Pedro noted. “That money is more than what you can get from development assistance and if that can be translated into sustainable livelihood projects then we will simultaneously have climate action and poverty reduction.”
The ECA is also working on projects to increase the value proposition of conservation where local communities earn a dividend from conservation efforts and, thereby, become the best agents for conservation.
The ECOSOC Coordination Segment was created by the United Nations General Assembly in June 2021 as an essential part of a range of measures to strengthen ECOSOC and enhance its ability to better deliver on its Charter role to coordinate the UN system and its subsidiary bodies in the economic, social, health, environmental and related areas.
Source: ECA
