President of the African Development Bank (AfDB) Group, Dr. Akinwumi Adesina, at the weekend estimated that Sub Saharan Africa (SSA) would require about $484 billion over the next three years to address the socio-economic impacts of the Covid-19 pandemic and support economic recovery The development finance banker.
Who gave this hint at the opening session of the 35th African Union Assembly in Addis Ababa, the Ethiopian capital, said that the most important lesson of the Covid-19 pandemic for Africa is the need to build a defense mechanism against external shocks, especially in healthcare and financial security.
He stressed that “Investing in health is investing in national security. Africa cannot afford to outsource the healthcare security of its 1.4 billion citizens to the benevolence of others.”
Specifically, the AfDB chief outlined three strategic priorities for an African healthcare defense system, namely building quality healthcare infrastructure;
developing the continent’s pharmaceutical industry, and increasing the capacity of vaccine manufacturing.
Adesina further told the African leaders at the event that the development finance institution planned to invest $3 billion to support Africa’s pharmaceutical and vaccine manufacturing capacity.
Speaking about other critical areas for the continent, such as debt management, he pointed out that Africa’s public debt, currently estimated at $546 billion, represented one-quarter of the continent’s GDP and remained higher than the combined total annual government revenues of $501 billion.”
According to him, the African Development Fund (ADF), the AfDB Group’s concessional lending arm, had supported low-income countries with $8.5 billion over the last five years.
While charging the African Union leaders to strongly support the Fund’s 16th replenishment in 2022, Adesina advised that funding restructures of the ADF would allow the Fund to go to market, leverage its $25 billion in equity, and raise an additional $33 billion in financing for low-income countries.
Recalling that African leaders had asked for re-allocated IMF Special Drawing Rights (SDRs) to be channeled through the African Development Bank, a prescribed holder of SDRs, the development finance expert said:
“Passing the re-allocated SDRs for Africa through the African Development Bank will serve Africa very well, provide financial leverage, and help recapitalize other African financial institutions, many of which the Bank helped to set up.”
Adesina reiterated his earlier calls for an African Financial Stability Mechanism to provide liquidity buffers to protect the continent against financial and economic shocks.
According to him, while other continents have such mechanisms, Africa was the only one that does not, leading to widespread regional spill-over contagion effects and instability from Covid-19-induced financial shocks. “African economies must be protected.”
The AfDB President Adesina called for accelerated action to advance Africa’s rapid development and sounded a note of optimism.
He stressed: “With your bold and visionary leadership, a new Africa is emerging. Just as the eagle soars above the storms, so will Africa soar and achieve its destiny. Africa is destined for greatness.”