African nations need $424 billion this year to help them cope with the devastation caused by the coronavirus pandemic, according to the head of the continent’s top multilateral lender.
After decades of progress in the continent’s fight against poverty, Covid-19 plunged 30 million Africans into “extreme poverty” in 2020. Meanwhile, Russia’s war on Ukraine has fueled inflation and left millions hungry. Surging prices along with slowing economic growth are also increasing indebtedness in the region.
“We should not minimise the impact of Covid-19 on African economies,” Akinwumi Adesina, president of the African Development Bank, said in an interview on Bloomberg Radio. “We have to expand the fiscal space for African countries. Secondly, we must tackle the whole issue of debt, you cannot run up a hill while carrying a backpack of sand on your back.”
From Ghana to Zambia, multiple African nations have tapped the International Monetary Fund to help revamp their debt and finance government budgets. The war on Ukraine worsened the situation just as countries in the continent were rebounding from the pandemic.
Global food prices surged to a record after Russia’s Feb. 24 invasion disrupted exports of grain and vegetable oil. That’s exacerbated a hunger crisis affecting countries including Ethiopia, Kenya and Somalia. Africa depends on Russia and Ukraine for about 41% of it’s wheat and maize, Adesina said.
The AfDB’s $1.5 billion plan to boost production will help farmers on the continent produce 30 million tons of food, he said, adding that obstacles in importing fertilizer may hit productivity by as much as 50%.
More from the interview:
On the IMF’s reserves:
“The special drawing rights from IMF have helped a lot, but Africa still needs to have $150 billion channeled to it.”
“We are talking to the countries who hold the SDR’s in their reserves, so far we have received positive signals from the UK and France but I cannot give you a specific timeline on when it will all be done.”
On Africa’s debt burden:
“A lot of the debt in Africa is infrastructure-related debt but if we are able to get a sustainable way to do this that would be much better. That sustainable way is that the private sector has to have a role, it shouldn’t just fall on the government.”