ADDIS ABABA – Africa countries need at least $454 billion to rebuild their economies which have been ravaged by the Covid-19 pandemic for the last two years, said Moussa Faki Mahama, Chairperson of the African Union Commission (AUC), on Wednesday.
The pandemic has set back progress on poverty reduction and key development goals across the region. Last month the World Bank projects the per capita incomes a third of African economies to remain lower in 2022 than a decade ago.
The AUC Chairperson said the “excruciating” socio economic impact of the pandemic has translated into a recession witnessed for the first time in decades, leading to a rising inflation and debt burden on African states.
“We, in fact, need 454 billion Dollars in order to respond to the economic crisis which has been caused by the pandemic,” Mahamat said.
His statement was echoed by the Executive Secretary of the UNECA Vera Songwe, who highlighted the depressed economic growth, high level of unemployment and the increasing number of states’ debt distress.
“The economic cost of managing the pandemic has been high,” said Songwe speaking at the Executive Council session which convened physically in Addis Ababa for the first time since the outbreak of the pandemic in 2020.
Debt to Gross domestic product (GDP) has risen from 40% in 2014 to almost 70% today, according to the Cameroonian economist.
“While in 2014, only 4 African countries were in high risk of debt distress, today 17 countries are in high risk of debt distress,” she said. “Already, 4 countries are in debt distress.”
Songwe, however, said the continent could use the current crisis as a stepping stone to build a resilient economy.
“Crises are a fork in the road, you can crumble under their weight or build solid resilience which propels you further into a more secure future,” the Executive secretary said.
Africa must strengthen its own financial institutions, she urged the foreign ministers.
“Our pension funds, infrastructure assets and much more can be part of the solution that delivers growth and sustainable recovery,” she said. “While strengthening capital markets can bring us closer to financial inclusion.
The progress Report on the Covid-19 pandemic and its socio-economic impact on African economies is among the major documented scheduled to be discussed by foreign ministers of African states during their two-day long Session, and will forward it to the leaders summit for discussion later this week.