President of African Development Bank Group (AfDB), Dr Akinwumi Adesina has cautioned African leaders not to be deceived that African economies can grow by embarking on a borrowing spree. He advised that instead of piling up expensive bilateral and commercial debts, African countries should maximise the potentials of domestic resources.
According to the former Nigerian Agriculture minister, who was re-elected for a second term of five years on Thursday, August 27, 2020, as the president of the continent’s premier development finance institution, the lockdown occasioned by the COVID-19 pandemic earlier this year has dealt a terrible blow to the economies of African countries.
He spoke on Friday at the ‘Virtual 2020 International Forum on African Leadership’ in Ivory Coast.
He said, “The negative impacts on economies have been massive. The African Development Bank estimates that Africa’s GDP will decline by $173-236 billion by the end of the year. Africa’s economic growth rate is expected to decline by 3.4%.
“The world has become more fragile as we all face common existential risks. All are affected, developed and developing countries. There’s no coronavirus for developed countries and coronavirus for developing countries.
“The pandemic has further laid bare the divide in the labour market. Those with skills are able to keep their jobs, while low-skilled workers, especially those employed in the informal sector lost jobs, worsened by the lockdowns. It is estimated that up to 30 million jobs will be lost in Africa by the end of the year.”
He urged African countries including Nigeria not to rely on debt for recovery but instead, better manage the revenue streams from their abundant natural resources.
Adesina further stated, “Building back African economies with resilience requires addressing its high debt levels. Total outstanding debt on the continent is over $700 billion.
“The lesson for Africa is clear: Africa simply cannot accelerate its development by relying only on debt, especially expensive bilateral and commercial debt. Africa must grow by mobilising domestic resources.
“Africa will build back faster by also harnessing and better managing the revenue streams from its abundant natural resources, including minerals, metals, biodiversity, blue economy, forest resources, agriculture and oil and gas, in order to boost domestic savings.”
“Africa must build back by focusing sharply on food and nutritional security. For many, the risk of hunger is higher than coronavirus. Without food, medicines or vaccines don’t work. There is vaccination against coronavirus, but there is no vaccination against hunger,” he added.
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