According to AfDB, Africa needs a huge amount of money here to recover from the effects of Kovid-19

#Other Countries The shock caused by the Kovid epidemic in Africa will be difficult to bear. The president of the AfDB unveiled the vast amount the continent needs for its economic recovery, and laid out ways to dispose of its resources and reduce infrastructure-related debt.

The African continent needs $ 424 billion this year to recover from the economic shock caused by the health crisis associated with Kovid-19. The amount was announced by African Development Bank (AfDB) President Akinwumi Adesina in an interview. bloomberg, “African countries need $424 billion this year to deal with the devastation caused by the pandemic, which has pushed 30 million Africans into extreme poverty,” he said.

Faced with this situation, the President of the AfDB has put forward a number of avenues capable of providing a portion of the financial resources that the continent needs to ensure its recovery and to prevent the resources obtained from being used to repay maturity. .

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Following in the footsteps of Senegalese President Mackie Sall, the current President of the African Union (AU), Adesina has campaigned for the reallocation of more Special Drawing Rights (SDRs) from the International Monetary Fund (IMF) in favor of African countries. “The IMF’s SDR has helped a lot, but Africa still needs $150 billion,” Adesina said. Overall, Africa benefited from only $33 billion of the SDR of $650 billion allocated by the IMF, proportionate to the specific weight of each member of the Bretton Woods Institute.

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Still the job is not easy. And for good reason, some developed countries, notably the United States, are not the major beneficiaries of this allocation of SDRs in favor of these redistributions because of their weight at the level of the IMF. Furthermore, according to the President of ADB, it seems that only the United Kingdom and France have sent positive signals with respect to Africa regarding the reallocation of the SDR. This means that the battle is far from won.

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Furthermore, this health crisis has further imbalanced the public finances of African countries, forcing many of them to resort to debt to meet their financial needs. As a result, African countries have increasingly high debt ratios globally and debt service payments are becoming a real bottleneck for many African countries, which are forced to dedicate a significant portion of their budgetary resources under the heading “debt servicing”. .

As a result, we must tackle the debt issue as a whole, with the president of the AfDB insisting that we cannot “run up a hill with a bag of sand on your back” given the burden of debt on African economies. and its detrimental effects on the development of the continent.

The chairman of the AfDB specifically pushes for a solution to involve the private sector more in infrastructure financing in Africa. “Most of the debt in Africa is infrastructure related, but if we can find a sustainable way to do this, that would be much better. This sustainable way is that the private sector should have a role to play, not the sole responsibility of the government. There should be,” he insisted.

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>>> ALSO READ: AfDB approves $1.5 billion facility to avert food crisis in Africa

And as misfortune never comes alone, the continent, which has not finished absorbing the effects of the health crisis on its economy, will still have to deal with the effects of the Russian-Ukrainian crisis, which has caused worrying disruptions in the supply chains of many products. Disruption has occurred. , which includes fertilizers essential to the continent’s agricultural production and agricultural products, has led to an increase in the prices of many products (fuel, oil, wheat, etc.), which African countries import in large quantities. For example, Africa imports 41% of its wheat from Russia and Ukraine.

Faced with this situation, which has exacerbated the African continent’s economic crisis and its worrying dependence on the outside for food, the AfDB has launched a $1.5 billion plan to stimulate production. agriculture by allowing the production of 30 million tons of agricultural products (wheat, rice, maize, etc.).

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About the Author: Forrest Morton

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