President of the AfDB, Dr Akinwumi Adesina, said this at a virtual Finance in Common Spring Meeting convened in collaboration with the Association of African Development Finance Institutions (AADFI) and the International Development Finance Club (IDFC) .
The meeting was tagged “Africa’s Green and Resilient Recovery: A Common Objective.”
The AfDB president added that it was also supporting the Africa Center for Disease Control (Africa CDC) with 28 million dollars to strengthen its capacity to tackle the issue of vaccines.
He added that the bank was currently working with partners on how to best support the financing of manufacturing of vaccines on the continent.
He emphasised that the bank was supportive of public development banks, which could be seen in the establishment of the AADFI and several national and regional banks on the continent.
He noted that public development banks must deepen “our ability to reach all parts of Africa.
“To ensure financial inclusion, especially for the unbanked, and expand access to finance, savings and insurance products and services, we need to work as one unified system.”
Adesina added that the unified system would accelerate economic development in Africa across all sectors.
He further projected the recovery of African economies from the COVID-19 pandemic, with an expected Gross Domestic Product (GDP) growth of 3.4 per cent in 2021.
“That recovery is expected to be across the board for oil-exporting countries, tourism-dependent economies, commodity-dependent economies and for non-resource dependent economies,” he said.
He also noted that tackling the issue of Africa’s debt must be of top priority, which he added was critical for the overall financial market stability in the short and medium term.
He also recalled that a number of efforts were being made to deal with the debt challenge.
“(This is) including the G20 Debt Service Suspension Initiative (DSSI) and the G20 Common Framework on debt treatment for public and private debts.
“Even then, the DSSI does not deal with reducing the quantum of debt of Africa, but only postpones debt service payments,” the AfDB president stated.
He noted that the cost of debt service would, however, continue to rise but added that the Special Drawing Rights (SDR) by the International Monetary Fund (IMF) would support the recovery process and address the debt challenge.
He urged that part of the SDR be used to support public development banks with additional resources to support countries to build back better, greener and with climate and environmental resilience.
Adesina also added that a share of the SDR should be used to pay down some of Africa’s huge private commercial debt, while bringing them into the G20 Common Framework.
“It is time to take this action now, to forestall what will be a payment crisis just down the road.
“I, therefore, would like to call for the strong collective support of Africa’s public development banks for these two strategic actions to assure financial stability of the continent and accelerate a post-COVID-19 economic recovery that is inclusive, green and climate resilient,” he said.
In his address, Mr Rémy Rioux, Chief Executive Officer, Agence Française de Développement (AFD), said Africa was ready for sustainable investment.
Rioux said the meeting was dedicated to Africa because the continent was a global priority “and its challenges requires us to go seek coordinated responses and actions.
“Let’s finance in common and build a common positive story of innovation and investment in Africa, leveraging and mobilising all willing stakeholders.
“The days of pure aid are over. Africa is ready for sustainable investment.”
The objective of the meeting was to devise joint actions to help boost a strong and inclusive recovery in Africa with the private sector.
It also aimed to give African public development banks the opportunity to demonstrate their role and contribution in supporting the transformation of the continent’s economy and societies towards sustainable and resilient development.