The Executive Secretary of the Economic Commission for Africa (ECA), Vera Songwe, on Friday 5 February 2021 met with African Ministers in charge of finance and the Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, to discuss immediate economic response to the COVID-19 pandemic.
During the virtual meeting, which was convened by the ECA and IMF, the ministers were unanimous in their call for additional liquidity, $500 billion in Special Drawing Rights (SDR) , better market access, more concessional resources and an extension in the Debt Service Suspension Initiative (DSSI), given the prolonged nature of the pandemic.
“We all know that the COVID-19 pandemic will persist for the next 2-3 years. Why are we extending the DSSI for 6 months and not 24 months?” said Ken Ofori-Atta, Ghana’s Minister of Finance and Economic Planning.
Mr Ofori-Atta said the cascading effects of COVID-19 were “a frightening thing for a finance minister to witness when they don’t have the means to respond.”
On access to the markets , Egypt’s Minister of Finance, Mohamed Maait, said “there’s a strong case for vulnerable countries to access the markets at affordable rate to afford essentials such as PPEs and food for their populations.” Equitable access to COVID-19 vaccines was highlighted as an imperative for building forward better.
“The world stands to lose an estimated $9 trillion if only the rich get COVID-19 vaccines. 40% of this loss will be in advanced economies,” said Ms Georgieva. In addition to vaccine availability, ECA’s Executive Secretary, Vera Songwe, stated that the issue of distribution and deployment were also worthy of serious attention.
And for this reason countries needed additional fiscal space and less austerity. Ms Georgieva noted that in order to build forward better, there is need for “bold and immediate action for response, recovery, and reset of African economies,” adding “liquidity and financing response is the bridge to vaccines and recovery.”
The objective of the meeting was to “seek IMF support in forging a way out of the crisis by transforming existing liquidity instruments and easing market access to alleviate the debt burden and provide much needed liquidity for the continent,” said Ms Songwe.
Noting that Ms Songwe’s call together with Finance ministers’ to triple concessional financing was “critical in the spring meetings’ conversations last year,” Ms Georgieva urged the ministers to prepare for a focused and practical discussion during the 2021 Spring Meetings.
“Now is the moment to demonstrate that SDR allocation can be part of a comprehensive support framework, together with debt reduction, debt relief and policy support actions in the countries,” said Ms Georgieva.
Minister Vera of Angola emphasized the importance of country reforms and in particular good governance reforms as an important component of the response and recovery plan. Angola she said she committed to continuing on its reform path. The meeting agreed on the need for a concerted effort to accelerate reforms to increase revenues, improve expenditure and manage debt to attract more private sector investments into Africa.