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 were on the rise coupled with significant currency depreciation.
He said it was as a result of this that the IMF, in April this year, projected inflation to increase to 12.2 percent by end of this year from 11 percent in 2021.
The Deputy Minister, also Member of Parliament for Ejisu, made this known when he chaired the 5th African Union Specialised Technical Committee on Finance, Monetary Affairs, Economic Planning and Integration of Africa in Lusaka, Zambia over the weekend.
Speaking on the theme: “Improving Africa’s Access To Capital: Debt Management And The Rising Influence Of Credit Rating Agencies,” Dr. Kumah said the immediate challenges facing the African continent included the impact of COVID-19 pandemic, spillover effects of the Ukraine war, illicit financial flows, credit rating, public debt, access to credit, as well as the structural transformation of trade, poverty, and inequality, among others.
He added that aforementioned items, coupled with those on the agenda, are timely and indeed critical to the advancement of our continent as we need to collectively work together to transform Africa into a global powerhouse for the future.
The Deputy Minister of Finance estimated Africa’s debt-to-GDP ratio to stabilise 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 fertiliser, and external financial channels. The conflict has caused a surge in the humanitarian crisis in Eastern Europe and intensified supply disruption and inflation.”
The Deputy Minister added that “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.”
“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 averred.