African leaders have decried the failure of the Global Financial Architecture (GFA) which has impacted negatively on the economies of many developing countries on the continent.
The Leaders, however, called for a total overhaul of the Global financial architecture to ensure effective growth on the continent
They spoke at the ongoing 2023 Annual General Meetings of the African Development Bank (AfDB) Group in Sharm El Sheikh on Tuesday.
According to them, international financial institutions have not been rational in their dealings with developing countries on the continent and called for a review of terms of dealings.
President of the AfDB Group, Akinwumi Adesina, said the global financial architecture was failing Africa and developing countries as they faced multiple global challenges.
According to Adesina, the global financial architecture needs to be modified to tackle more effectively global challenges and to accelerate the achievements of the Sustainable Development Goals (SDGs).
“Basically, we must query the ability of global financial architecture to serve the needs of the world, especially the needs of the developing world like Africa.
“Africa alone will need 1.3 trillion dollars annually to achieve its SDGs needs by 2030.
“In addition, Africa requires 144 billion dollars a year to recover from the effect of the COVID- 19 pandemic to retrieve their economies back.
“Today, Africa faces three major challenges, COVID, climate and conflict and the solution to these challenges is finance..’’
According to him, GFA needs to tackle climate change which differs from the economies of Africa.
The president said: “Africa contributes just three percent of global warming, yet it is facing devastating effects that cost it between seven to 15 billion dollars in losses yearly.
“Africa will need 2.7 trillion dollars to bridge the gap by 2030, yet the global financial architecture provides only three percent of global climate finance for Africa.
“ Africa received about 18 billion dollars annually in climate financing between 2016 and 2019.
“The global financing architecture is impotent to tackling the debt crisis, especially in developing countries and in Africa, in the face of COVID-19, climate change and Russia-Ukrainian crisis.
Adesina said Africa’s debt levels still remained high and efforts to restructure the debt had changed dramatically.
“While bilateral debt accounts for 27 percent of debt compared to 52 percent in 2000, commercial debt now accounts for 43 percent of total debt, compared to just 20 percent in 2000. ‘’ he said.
The Vice President of the Republic of Tanzania, Dr Isdor Mpango, reiterated the need to revisit the architecture of the GFA, especially with new sets of challenges facing the continent.
Mpango said:“We need to review the lending terms and focus on delivering of SDGs. We need to review the policy conditions of multilateral Financial Institutions.
“Capital base on the continent should be increased to match the huge demands of developing countries.
“The Multilateral Financial Institutions should ensure to accelerate funding sources which are highly inadequate and their support is aligned to national priorities.
“ They should also support homegrown financial institutions among others to drive the economies on the continent.”
The Egypt Prime Minister, Mostafa Madbouly, emphasised a change in the perception of countries on the continent.
He said:“ Africa should not only be source of resources but a contributor to development and an active ingredient to growth.
“Africa pays heavy price in the effect of global pandemic because we have found ourselves in the circle of climate change effect.
“Therefore, it is high time the world sees Africa as a priority when it comes to developmental projects.”
The prime minister said African countries should be realistic in seeing their success and work together for the growth of the continent.
Similarly, the Prime Minister of Rwanda, Dr Edouard Ngirente, also reiterated the need for collaboration among countries on the continent.
“All African countries are targets in terms of development, we need to cooperate, promote and help each other to achieve development on the content,’’ he said.
Meanwhile, the Burundu Prime Minister, Gervais Ndirakobuca, called on countries on the continent to ensure food security as this was instrumental to the development of Africa.
Also speaking, the UAE Special Envoy on Climate Change, Dr Sultan Al-Jaber, expressed the Emirates’ commitment to supporting climate finance to Africa.
BRANDPOWER reports that the AfDB Annual Meetings which began on May 22 would end on May 26.