BUSINESS REPORTER
African Development Bank Group (AfDB) president Akinwumi Adesina has said that the most important lesson of the Covid-19 pandemic for Africa is the need to build a defense mechanism against external shocks, especially in healthcare and financial security.
“Investing in health is investing in national security,” Adesina told African leaders on Saturday, at the opening of the 35th African Union Assembly in Addis Ababa, Ethiopia.
“Africa cannot afford to outsource the healthcare security of its 1.4 billion citizens to the benevolence of others.”
He said Africa needs US$484bn over the next three years to address the socio-economic impacts of the Covid-19 pandemic and support economic recovery.
Adesina said building quality healthcare infrastructure, developing the continent’s pharmaceutical industry and increasing the capacity of vaccine manufacturing are the three strategic priorities for an African healthcare defense system.
He said the AfDB planned to invest US$3bn to support Africa’s pharmaceutical and vaccine manufacturing capacity.
Adesina said Africa’s public debt, currently estimated at US$546bn, represents one-quarter of the continent’s GDP and is higher than the combined total annual government revenues of US$501bn.
Adesina said the African Development Fund, the bank group’s concessional lending arm, had supported low-income countries with US$8.5bn over the last five years.
Calling on African Union leaders to strongly support the Fund’s 16th replenishment in 2022, Adesina advised that a funding restructure of the African Development Fund would allow the Fund to go to market, leverage its US$25bn in equity, and raise an additional US$33bn in financing for low-income countries.
The Bank Group chief reminded African leaders that they had asked for re-allocated IMF Special Drawing Rights (SDRs) to be channelled through the AfDB, a prescribed holder of SDRs.
“Passing the re-allocated SDRs for Africa through the African Development Bank will serve Africa very well, provide financial leverage, and help recapitalise other African financial institutions, many of which the Bank helped to set up,” he said.
Adesina repeated his earlier calls for an African Financial Stability Mechanism to provide liquidity buffers to protect the continent against financial and economic shocks.
He said that while other continents have such mechanisms, Africa was the only one that does not have which has led to widespread regional spill-over contagion effects and instability from Covid-19-induced financial shocks.
“African economies must be protected,” Adesina said.
Addressing the summit plenary earlier, African Union Commission Chairperson Moussa Faki Mahamat said the Covid-19 pandemic had highlighted Africa’s unpreparedness for external shocks like new viruses. He said Africa’s 2.1% contraction in growth had set it back and threatened the achievement of the African Union’s Agenda 2063.
The African Union’s theme, 2022 Year of Nutrition, focuses on strengthening resilience in nutrition and food security on the African continent.
With the International Fund for Agricultural Development and the African Union Commission, the African Development Bank launched the Facility for African Food Security and Nutrition at the United Nations Food Systems Summit in 2021.
Adesina said the facility “will mobilise US$1bn to support the delivery of climate resilient technologies to 40 million farmers and produce 100 million metric tons of food to feed 200 million people.” This will reduce the number of people facing hunger in Africa by 80%, he said.
Adesina called for accelerated action to advance Africa’s rapid development and sounded a note of optimism.
“With your bold and visionary leadership, a new Africa is emerging. Just as the eagle soars above the storms, so will Africa soar and achieve its destiny. Africa is destined for greatness,” he said.
