Deputy Minister of Finance, Dr. John Ampontuah Kumah has called on the Members of the African Union, to help rebrand Africa as the Global Frontier for Productive Investments.
According to him, Inflationary pressures and debt are on the rise coupled with significant currency depreciation, and as a result, in April, the IMF projected inflation for 2022 to increase to 12.2 per cent from 11 per cent in 2021.
The Deputy Minister, also Member of Parliament for Ejisu made this known when he Chaired the 5th African Union Specialized Technical Committee on Finance, Monetary Affairs, Economic Planning and Integration of Africa on behalf of his boss, Ken Ofori – Atta in Lusaka Zambia on the weekend.
Speaking on the theme of the Fifth (5th) ordinary session: “Improving Africa’s access to Capital: Debt Management and the Rising Influence of Credit Rating Agencies”. Dr. Kumah said the immediate challenges the African continent is facing include the impact of covid 19 pandemic, spillover effects of the Ukraine war, Illicit Financial Flows, credit rating, public debt, access to credit, and structural transformation of trade, poverty, and inequality, among others.
He added that these items coupled with those on the agenda are timely and indeed critical to the advancement of our Continent as we need to collectivity work together to transform Africa into a global powerhouse of the future.
The event allowed him to task the stakeholders from the African Continent with an opportunity to examine how they can all synergize the efforts for growth and development in the region.
The Deputy Minister of Finance, noted that Africa is facing these crises with less financial resources than in the past crisis, adding that currently Africa’s debt-to-GDP ratio is estimated to stabilize at around 70 percent in 2022 with a significant number of member states in debt distress.
He said “the reality today is that the Russia-Ukraine crisis is derailing Africa’s slow recovery from the COVID-19 pandemic. Specifically, the war is affecting economies with dependency on oil and gas exports or imports, tourism, imported grain and fertilizer, and external financial channels. The conflict has caused a surge in the humanitarian crisis in Eastern Europe and intensified supply disruption and inflation”.
“Before the surge of the Russia-Ukraine conflict, continental prospects drawn from the latest Africa’s Development Dynamics Report were on a positive track with an expected 3.9 percent economic growth in 2022, one percentage point lower than the global average of 4.9 percent” John Kumah stated.
“Even though, the growth projection was still below the needed minimum of 7 percent growth required in the long run to accelerate progress towards Agenda 2063, “The Africa We Want”, it is now anticipated that macroeconomic fundamentals of African economies will further weaken as a result of this multi-pronged climate, health, and socio-economic shocks,” he added.
Dr. Kumah further called on members of the Africa Union to assist in speeding up the operationalization of the African Central Bank, the African Monetary Fund, the African Investment Bank, and the African Stock Exchange as it will be crucial in helping secure the long-term capital needed for achieving the Agenda 2063 vision of a united, prosperous and peaceful African continent.
Dr. John Kumah however, tasked the Union not to also not forget that poverty and inequality are on the rise, by explaining that Projections from the African Development Bank suggest that, about 30 million Africans were pushed into extreme poverty in 2021 and that about 22 million jobs were lost in African countries the same year due to the pandemic, also estimated that, about 1.8 million and 2.1 million more people could be drawn into extreme poverty in 2022 in 2023 respectively.
