Wide-ranging reforms will aid Africa’s sustainable recovery, says ECA’s Antonio Pedro

BUSINESS REPORTER

African countries should institute wide-ranging fiscal reforms to expedite sustainable recovery from multiple crises which have hindered industrialisation and economic diversification, the Economic Commission for Africa’s (ECA) acting executive secretary Antonio Pedro (pictured) has said.

“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,” Pedro said in his remarks at the 2023 Coordination Segment of the Economic and Social Council (ECOSOC) last week.

He said Africa’s recovery efforts have been undermined by the ongoing war in Ukraine, tightening international financial conditions and the climate crisis.

“For African countries, appropriate policy choices through fiscal reforms as well as building coherent and effective frameworks for mobilising domestic revenue are needed,” 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 Russia-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,” Pedro said.

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.

Calling for a simplified process of rechanneling Special Drawing Rights to developing countries and the honouring of pledges, 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.

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.