Ghana Prez Nana Addo Calls For ‘Debt Cancellation’ in France
Ghana’s President, Nana Addo Akuffo-Addo on Tuesday, at the Summit on Financing African Economies, in Paris, France, called on international financial institutions to ‘cancel debts’ owed by African economies.
President Akuffo-Addo attributed the urgent need to the critically low performances of African economies amidst the coronavirus pandemic.
“The pandemic has also ensured that the total fiscal deficit of Africa rose from 4.7% of GDP in 2019 to 8.7% in 2020; with overall debt levels are also estimated to have increased from 57% of GDP in 2019 to 70% in 2021.”
“Without the fiscal room to breathe, Africa could truly become ‘the forgotten continent, and that is why there is urgent need for comprehensive debt relief and debt cancellation”, he appealed.
The ECOWAS Chairman called for reform of the global financial architecture (GFA) to enable it respond better to Africa’s needs.
The President said the Bretton Woods Conference created GFA, had proven unfavorable to Africa over the past 77 years.
He noted that the economies of Europe, America, and Asia had grown significantly during the period, whilst those of Africa had not.
This, he this collateral damage from the Cold War, inequity in the global economic system, an economic relationship built on power and resource grab,
“These challenges have resulted in a global economic system that has proven to be incapable of supporting lives and livelihoods, and allocating sufficient long-term resources to support Africa’s economic transformation.”
President Akuffo-Addo noted further that Africa’s development finance cost does not reflect its economic fundamentals, credit, or default cost, citing the case of Ghana where the country’s sovereign debt is more expensive than that of the similarly-rated Belarus, which pays some 100 basis points less than Ghana.
“Just as the Bretton Woods institutions helped to rebuild the post-war global economy, and rekindled international economic cooperation, 77 years ago, there is now a historic opportunity to reset the global financial system’s economic rules to give African countries an equal chance at development, in the wake of the pandemic, ” he said.
President Akuffo-Addo proposed an overhaul of the current global financial architecture to provide for access and equity to long-term finance to support economic transformation in Africa.
This, he said, should include the establishment of an African Stability Mechanism, akin to the European Stability Mechanism, which would stand as a permanent firewall for Africa to safeguard and provide instant emergency access to financial assistance for countries in financial difficulty.
The President suggested bridging of the immediate liquidity and potential insolvency issues confronting the African continent and its financial institutions.
“I urge the IMF to on-lend twenty-five to thirty per cent of new six hundred and fifty billion dollars (US$650 billion) SDRs, to support low and vulnerable middle-income countries before the 2021 annual meetings,”
“Increase IDA funding to strengthen the balance sheet of the World Bank, replenish the African Development Bank and Afreximbank to support investment in green investments, facilitate trade, and support the private sector to create jobs and build back better,” he added.
Source: GNA
