124 Views
Ph:DR: African countries with the highest levels of poverty
Development experts have warned that persistent poverty and inequality risk undermining prosperity, peace and security in Africa unless governments commit to innovative and participatory development models. “It is becoming increasingly unlikely that African states will achieve many of the targets set out in the 2030 Sustainable Development Goals,” says the Deputy Executive Secretary and Chief Economist of the Economic Commission for Africa (ECA ), Hanan Morsy, “Global shocks have wiped out more than two decades of progress the continent has made in reducing poverty. We need sustainable interventions.
In light of this, ECA organized a round table during the 55th Conference of African Ministers of Finance, Planning and Economic Development for experts to reflect and recommend actions to help Member States reduce their economic and social vulnerabilities and inequalities.
Harvesh Seegolam, Governor of the Bank of Mauritius, explains that when the COVID19 pandemic hit in 2020, the Mauritian tourism sector came to a halt. To mitigate the effects of the slowdown, the government has proposed conventional and unconventional measures. One of them was to make the Central Bank of Mauritius an independent institution.
“The government has introduced moratoriums to support targeted sectors; introduced alignment credit,” says Mr Seegolam, adding that the government has also established the Mauritius Investment Cooperation, which operates independently from the Central Bank, and has independent audits to ensure that the money invested benefits the the bank.
The main objective of the Mauritius Investment Cooperation is to create more wealth for the future generation of the country. The intervention became cost-effective.
Ethiopian Finance Minister Ahmed Shide says Ethiopia, like any other African country, was affected by overlapping shocks – Covid19, war in Ukraine, conflict and drought – and the country’s response includes a combination of fiscal and monetary policies.
Precautionary measures, he says, have been put in place to contain Covid19. The government has postponed personal income tax payments, rescheduled bank loan repayments, granted tax amnesty to different sectors, boosted local food production by cultivating more land, and boosted meat production. . The government has embarked on more irrigation activities and expanded the Ethiopian Airline as well as digital payment systems to facilitate transactions.
Central African Republic Minister of Finance and Budget Herve Ndoba says the country is facing shortage of fuel, high cost of transporting basic commodities mainly because it is a landlocked country.
“To meet these challenges, the government has created a dry port with warehouses for importers, set up customs levies to limit the inflation of imports. Specifically, the government created a custom base to take advantage of production costs and adjusted fuel prices at the pump,” Ndoba said.
“Our goal is to increase the domestic product through community levies. We are working on financial diversification, namely green financing, blue economy.
According to the Executive Director of the Joint United Nations Program on HIV/AIDS, Winnie Byanyima, the biggest challenge for Africa is access to financial services. Even before the Covid-19 crisis, the war in Ukraine, countries borrowed at an interest rate of over eight percent (8%), while high-income countries borrowed at lower rates of up to one percent (1%).
The high cost of borrowing, she says, robs Africa of the prospects of achieving the SDGs. Furthermore, the challenge of not being able to borrow in countries’ own currencies shows how unequally countries are treated when it comes to accessing affordable finance.
“The discussion on financing Africa is important ahead of the SDG Summit in September 2023,” said Ms.me Byanyima, adding that there is a need for countries to tackle the high cost of debt, link financing to the achievement of the SDGs, do more to ensure that Africa has a seat in the G20 forum.
Acting Executive Secretary of the Economic Commission for Africa (ECA), Antonio Pedro, says Africa is lagging further behind other regions of the world and now accounts for the largest share of the world’s poor due to increasing poverty and inequality. As a result, many African countries face declining incomes, increasing debt stress and tight fiscal space, all of which limit their ability to respond to economic crises.
He says partnerships are key to addressing Africa’s challenges.
“During the pandemic, ECA worked with Ministers of Finance to find solutions to counter the effects of the pandemic in their respective sectors, helped African countries to source vaccines for their citizens,” notes Mr. Pedro . (CEA)
