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African leaders to brainstorm on economic future of continent post COVID-19

Five African presidents, ministers, leaders of the private sector, development actors and academics will gather in Cabo Verde from 2nd to 4th December to brainstorm new ways of financing the post COVID-19 recovery and accelerating development in Africa, at the 2021 African Economic Conference.

Nigeria’s Akinwumi Adesina President, African Development Bank Group (AfDB) and many Africans are expected at the conference with the : “Financing Africa’s post-COVID-19 development.” and organised by the United Nations Development Programme, the African Development Bank and the United Nations Economic Commission for Africa.

Expected participants include: José Maria Neves, President of the Republic of Cabo Verde; Felix-Antoine Tshisekedi Tshilombo, President of the Democratic Republic of the Congo; Paul Kagamé, President of the Republic of Rwanda (TBC); Macky Sall, President of the Republic of Senegal (TBC); Nana Akufo-Addo, President of the Republic of Ghana (TBC).

Others are: Achim Steiner, UN Under-Secretary General and Administrator of the UNDP Vera Songwe; UN Under-Secretary General and Executive Secretary, United Nations Economic Commission for Africa (UNECA); Ahunna Eziakonwa, UN Assistant Secretary General, UNDP’s Assistant Administrator and Regional Bureau for Africa Director and more than 100 other speakers from African governments, private sector, and leading academics.

The COVID-19 crisis has exacerbated the pressure on Africa’s development financing challenges by making public finances more strained, debt unsustainable, and foreign direct investment retracting. Across Africa, available data show that the COVID-19 crisis has left more than 30 million people in extreme poverty, living on less than $1.90 a day.

Read also: COVID-19: Lack of social protection escalates welfare losses in Nigeria

To combat the effects of populations plunging into extreme poverty, governments on the continent have announced fiscal stimulus packages ranging in cost from about 0.02 percent of GDP to about 10.4 percent of GDP.

While these are lifesaving interventions, African governments need significant additional gross financing to respond to these needs in 2022, according to the UNDP and the AfDB. These gross financing, they note, needs to exceed the critical threshold of 15 percent GDP for most countries.

They also noted that access to international capital markets, a growing debt financing source for many African countries, has declined as investors’ perception of risks increases, while capital flight from Africa, estimated at over $90 billion since January 2020, and investor risk aversion have caused volatile market movements.

The UNDP and the AfDB warned that tightening global financing conditions make it more expensive for governments to get the financing they need to recover from the pandemic and refinance maturing debt as domestic sources of financing such as tax and non-tax revenues are expected to contract as GDP drops, and exports and imports decline.

They reiterated that the supply and demand shock caused by the COVID–19 pandemic directly impacted the revenues of many African governments through reduced exports earnings and lower domestic tax revenues.

To this end, the African decision-makers, projects leaders and thinkers will discuss innovative and sustainable options to finance Africa’s post-COVID development. They will reimagine development financing, discuss the reform of Africa’s financial systems to meet development challenges and whether Africa is on the verge of a new debt crisis.

Papers from prominent researchers were selected through an open competition and will provide innovative ideas to mobilize domestic public and private resources in the age of the digital revolution, enhance Africa’s position in the international financial system, review the role of public development banks, explore sustainable finance solutions, regional integration and the role of the global financial safety net; policy options for managing capital flow volatility; financial regulatory reforms and the role of climate risks.

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