Africa Industry

Africa must urgently invest in economic recovery

Africa should deploy innovative resource mobilization and accelerate economic recovery from multiple crises which have eroded two decades of development gains and increased poverty, Ministers of Finance have urged.

In a Ministerial Statement adopted at the 55th session of the Conference of African Ministers of Finance, Planning and Economic Development, in Addis Ababa, Ethiopia, ministers reiterated the urgency of transforming Africa’s economies and driving industrialization. They underscored the need to expedite economic recovery in Africa which is likely to miss many of the Sustainable Development Goals (SDGs).

Noting that the COVID-19 pandemic, the war in Ukraine and climate change will hinder Africa’s efforts to achieve the SDGs and Agenda 2063, the Ministers said the triple crises have disrupted food and energy markets, exacerbated food insecurity and caused high inflation rates which have pushed millions of Africans into poverty and economic hardship.

Africa needs to invest approximately $66 billion in its health systems and health infrastructure. Furthermore, financing to close infrastructure deficits amounts to between $137 billion and $177 billion by 2025.

In addition, the Ministers recognised that meeting SDG targets to eradicate extreme poverty and reduce inequality within seven years in line with the 2030 Agenda, is becoming increasingly unlikely. Poverty and inequality in Africa will therefore pose high risks to prosperity, peace and security, and to the social contract.

The Ministers, therefore, acknowledged the need to stimulate economic recovery and to protect vulnerable populations against soaring inflation – which was forecast to reach 12.4 per cent in Africa in 2023. Rising interest rates, and the tightening of monetary policy by central banks to combat inflation have contributed to the worsening of the already limited fiscal space, the Ministers statement said.

The Agreement establishing the African Continental Free Trade Area (AfCFTA) will increase intra-African trade in agrifood, services, industry, energy and mining while attracting cross-border investments, the Ministers noted in the statement calling on the ECA to support the continent with strategic thinking and new perspectives achieve prosperity by 2030 and realize the objectives of the 2030 Agenda and Agenda 2063.

ECA Acting Executive Secretary, Antonio Pedro, in closing the conference, said in order to foster recovery and transformation in Africa, the continent should prioritize skills enhancement, industrialization and economic diversification, infrastructure development, intra-Africa trade and innovative financing.

“We have the mandate to deliver on our promise of shared prosperity to the people of Africa,” Mr. Pedro said, adding that sustainable solutions must be developed by Africa and partnership and collaborations were key to a transformed Africa.