Top UN official says Japan can bail out Africa

BUSINESS REPORTER

Government and private sector partners in Japan could play a key role in supporting African countries in the wake of new shocks caused by the war in Ukraine, a top UN official has said.

Russia’s invasion of Ukraine under a “special operation” has seen supply chain disruptions in the supply of wheat and maize.

Ahunna Eziakonwa, UN Assistant-Secretary General and UNDP regional director for Africa, said “we have never experienced a greater challenge or pressure on our ability to sustain development in Africa”.

“Reinforced multilateralism and strong partnerships, including with Japanese government entities and private sector, will be decisive in supporting African countries’ aptitude to respond to the new economic shocks caused by the war in Ukraine, at a time when they were already reeling from the impact of the Covid-19 pandemic,” Eziakonwa said.

“This new crisis has direct implications including food and fuel price hikes, trade disruption, and overall macroeconomic instability, which indirectly will lead to economic stress that could trigger violent protests and unconstitutional transfers of political power, especially in already fragile regions.”

Her remarks came at the conclusion of a five-day mission to Japan during which she explored stronger and more innovative partnerships between UNDP and the Government of Japan, the country’s development agencies and private sector, as well as with civil society and youth groups.

Eziakonwa said the prolonged conflict has serious implications on food security in Africa and risks eroding the development gains and progress that Africa has made in the past few decades, given Africa’s high dependency on food imports from Russia and Ukraine.

In 2020, African countries imported US$4bn worth of agricultural products from Russia, 90% of which was wheat. Russia and Ukraine account for 30% of global wheat production and 80% of global sunflower oil production.

She said African exports growth is now expected to shrink by half  despite the fact that several African countries were among the best performing economies prior to the compounded impacts of the Covid-19 pandemic and the outbreak of war in Ukraine.

“We now forecast exports to grow by 4.1% in 2022 as opposed to 8.3% had the war not occurred. Businesses in Africa will bear the costs of rising energy prices and could experience severe difficulties. The rise in fuel prices also increases transport costs for manufacturers,” Eziakonwa said.

Moreover, the impact of the war could push Africa into serious debt distress, making countries less likely to meet their debt obligations, and already scarce budget resources will be diverted to pay debts as opposed to financing much needed development objectives, she said.

“Strong measures are needed to mitigate the negative impact on African economies. Accelerating agricultural productivity through modernisation, for example, is a great priority. The African Continental Free Trade Area provides a platform to raise Africa’s low productivity, accelerate industrialisation and promote higher investment in the continent. Harnessing digital technologies and promoting free and fair competition will also be fundamental in revitalising African economies,” Eziakonwa said.

She added that the international community, including Japan, can support key priorities to move Africa forward starting with intensifying efforts to reframe development finance. The international community’s commitment to close the US$ 2.5 trillion per annum funding gap to achieve the SDGs is an imperative, the UN official said.

“Partnerships are essential to build resilience in African countries especially by transforming Africa’s resource wealth by taking advantage of blue-carbon markets and green financing mechanisms. Other critical areas include climate risk-sensitive investment, environmentally sustainable projects and sustainable energy investment,” Eziakonwa said.

Her mission to Japan is another milestone ahead of the 8^th Tokyo International Conference on African Development (TICAD) scheduled to take place in Tunisia from August 27 to 28.

In March, African ministers and their Japanese counterparts held a Ministerial Meeting which identified some of the key development challenges facing the continent as preparations get underway for the Summit-level meeting.

Since its inception in 1993, one of TICAD’s primary aims is to facilitate global partnerships between the public and private sector.

As a co-organiser, UNDP has supported TICAD as thought leaders, in providing expertise on both conceptual and regional matters.

Additionally, UNDP has helped facilitate coordination and partnerships, advocacy for sustainable development, and drawn upon its vast network in Africa in order to provide logistical and operational support.