From the president’s desk: Investment needed to make Africa a champion of economic growth
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Dear Fellow South African,
Last week media around the world carried heart-rending images of a young boy adrift off the coast of the Spanish enclave of Ceuta. He was clinging to a makeshift buoy made of plastic bottles and desperately trying to make it to shore.
Over the years we have become accustomed to seeing images of African men, women and children crammed into boats and makeshift rafts trying to reach Europe. According to relief organisations more than 20 000 people have lost their lives trying to cross the Mediterranean since 2014.
As we observe Africa Day tomorrow, these tragic stories remind us of the huge task we have to build a better life for all the people of Africa.
While we celebrate the progress we have made towards building a peaceful and prosperous continent, events in faraway North Africa show that we still have a long way to go.
Life is so difficult for millions of people on our continent and opportunities so few that they would risk their lives crossing the sea in pursuit of a better future.
The Covid-19 pandemic has made people already suffering from the effects of conflict, under-development and poverty even more vulnerable.
African economies have been severely damaged and growth prospects are greatly diminished. Many of the continent’s developmental gains may be reversed as the fight against the pandemic takes precedence over other national priorities like poverty eradication. Although low-income countries are especially vulnerable, middle income countries like our own have also been severely hit.
To support the continent’s economic recovery, African governments have been working through the African Union (AU) to mobilise significant financing to meet their developmental goals.
Last week, I joined several African leaders at a summit in Paris hosted by French President Emmanuel Macron on the financing of African economies in the post-Covid-19 era.
South Africa reiterated its support for a comprehensive and robust economic stimulus package for Africa to aid the recovery. But we said this should not be a substitute for official development aid.
We welcomed the steps taken by financial institutions like the World Bank and International Monetary Fund (IMF) to support low- and middle-income countries, and called for further measures to support vulnerable countries. This would include an allocation by the IMF of what are known as Special Drawing Rights, where on the basis of membership quotas, around $33 billion will be released to increase the reserves of African countries. African leaders have however argued that an amount of $33 billion, while welcome, is not sufficient to meet the challenges that the continent faces. As the more developed economies are set to receive much of the $650 billion of Special Drawing Rights to be issued, we believe that 25% (which equates to $162.5 billion) should be made available to African countries.
Other measures would include increased concessional financing by international institutions and development agencies, and additional measures led by the G20 countries to provide African countries with debt relief.
In what was described as a New Deal for Africa, leaders and international organisations recognised that we share a collective responsibility to implement financial relief measures for African countries in distress.
The international experience with Covid-19 has been a lesson in the importance of collaboration between African countries and with our international partners. Our gains as a continent have been because we have both drawn on our own capabilities and worked with the international community.
As African countries, we want to help ourselves and not be told what is good for us. The principle of ‘nothing about us without us’ should be applied. It is important that we affirm our sovereignty as free and independent states capable of determining the destiny of our continent.
While countries have immediate financing needs, a sustainable economic recovery can only be assured if we increase levels of investment on the continent. Investing in African economies will contribute to making Africa the next champion of global growth.
The African Continental Free Trade Area will play a key role in the continental recovery. We also envisage a greater role for the continental network of African public development banks to mobilise funding to support key projects in health, education, infrastructure, green growth and other sectors.
African leaders acknowledge the centrality of good governance, public debt management, financial integrity and creating a more favourable climate for private sector investment in their economies.
The Covid-19 pandemic has resulted in unprecedented levels of unity and cooperation between African countries. It has seen the continent strengthen its ties with the broader international community and global institutions.
As we observe Africa Day, let us deepen our efforts to achieve a sustainable and lasting social and economic recovery for the citizens of Africa. Ours must become a continent that is thriving and prosperous, not one from which its people are dying in an attempt to leave.
As a country, we are part of Africa and Africa is part of us. What happens in one part of our continent affects us all, and so we must work together to recover from this crisis, and to ensure that our continent grows and thrives.
I wish you all a happy Africa Day.
With best regards,