African nations need $424 billion this year to help them cope with the devastation caused by the coronavirus pandemic, according to the head of the continent’s top multilateral lender.
After decades of progress in the continent’s fight against poverty, Covid-19 plunged 30 million Africans into “extreme poverty” in 2020. Meanwhile, Russia’s war on Ukraine has fueled inflation and left millions hungry. Surging prices along with slowing economic growth are also increasing indebtedness in the region.
“We should not minimise the impact of Covid-19 on African economies,” President of the African Development Bank, Akinwumi Adesina, said in an interview on Bloomberg Radio.
“We have to expand the fiscal space for African countries. Secondly, we must tackle the whole issue of debt; you cannot run up a hill while carrying a backpack of sand on your back.”
From Ghana to Zambia, multiple African nations have tapped the International Monetary Fund (IMF) to help revamp their debt and finance government budgets. The war on Ukraine worsened the situation just as countries in the continent were rebounding from the pandemic.
A lot of the debt in Africa is infrastructure-related debt but if we are able to get a sustainable way to do this that would be much better. That sustainable way is that the private sector has to have a role, it shouldn’t just fall on the government.
Global food prices surged to a record after Russia’s February 24 invasion disrupted exports of grain and vegetable oil. That exacerbated a hunger crisis affecting countries including Ethiopia, Kenya and Somalia. Africa depends on Russia and Ukraine for about 41% of its wheat and maize, Adesina said.
The AfDB’s $1.5 billion plan to boost production will help farmers on the continent produce 30 million tons of food, he said, adding that obstacles in importing fertilizer may hit productivity by as much as 50%.
On Africa’s debt burden, Adesina said: “A lot of the debt in Africa is infrastructure-related debt but if we are able to get a sustainable way to do this that would be much better. That sustainable way is that the private sector has to have a role, it shouldn’t just fall on the government.” (Bloomberg)
