President Nana Akufo-Addo has asked the international community to step up efforts to assist underdeveloped nations in surviving the devastating effects of the deadly coronavirus epidemic.
On Tuesday, June 21, President Akufo-Addo delivered a keynote speech at the 15th Edition of the European Development Days (EDD) in Brussels, Belgium, emphasising the need for the international community to step up efforts to assist developing countries in protecting their economies from the devastating effects of Covid-19.
The President also noted that the simmering Russian-Ukrainian war has exacerbated the predicament of emerging economies, a trend he claimed is having an impact not just on Ghana and Africa, but also on much of the developing world.
He also highlighted the lethal consequences of Russia's ongoing invasion of Ukraine on African economies and what the future holds for developing nations, citing a recent UN analysis that says 70 percent of Africa's economy are in grave danger as a result of the Russian conflict in Ukraine.
"The World Bank also warns us that, as a result of the conflict, the number of impoverished people in Sub-Saharan African nations would increase by 50 million this year, from 413 million to 463 million," he said.
"In the middle of this, 18 African nations have seen credit downgrades, even as all economies are suffering negative consequences from last year's pandemic, and we, in Africa, are also facing the possibility of so-called "taper-tantrums," as investors," President Akufo-Addo stated.
He also stated that, at the moment, support for non-IMF programme countries to reduce debt burdens is limited, as the Debt Service Suspension Initiative (DSSI), the first facility designed by the G20 countries to provide relief to economies facing severe debt challenges, has expired and has not been renewed.
In these challenging circumstances, President Akufo-Addo pointed out that Africa has received just $33 billion of the 650 billion Special Drawing Rights (SDR) allocated by the IMF in August 2021, which was supposed to bring major assistance (about 5 per cent).
Furthermore, the commitment made at the Paris Summit in May 2019 to reallocate roughly US$100 billion in SDR allocations to African economies has not materialised.
As of April 2022, he said, commitments totaled around US$36 billion.
"Then there's the issue of the "African Risk Premium," which increases the cost of capital when African entities borrow from the market, and which must be addressed, especially because Africa offers the highest return on investment available anywhere, and has a good track record of debt repayment," the President said.
The President stated that the combined effects of the debt situation, rising interest rates, and rising cost of living are causing severe macroeconomic and financial instability, and that "what is clear, he added, is that the resulting damage cannot be cured so easily with the limited fiscal tools at our disposal and national policy adjustments."