African Ministers of Finance, Planning and Economic Development have decried slow pace of accessing COVID-19 vaccines and funding for vaccine equity.
The ministers expressed their disappointment in a communique issued at the end of the 53rd session of Conference of Ministers organised by the Economic Commission for Africa (ECA).
The hybrid event, under the theme: ‘Africa’s sustainable industrialization and diversification in the digital era in the context of Covid-19’, ended on Tuesday.
It was hosted by Ethiopia and monitored in Lagos via a webinar by the News Agency of Nigeria (NAN) last week.
Participants said without rapid access to vaccines, the tidal wave of coronavirus will overwhelm Africa’s fragile health systems, decimate limited human resources and set back its recovery.
They noted that by March 18, the continent had crossed the grim milestone of 4.1 million coronavirus infections, with a case fatality ratio in excess of the global average.
The ministers expressed deep concern over the impact of the pandemic on the health of African citizens, economies, as well as on the continent’s prospects of achieving the African Union 2030 Agenda for Sustainable Development and Agenda 2063.
According to the ministers, the impact of the pandemic on Africa’s economies has been devastating.
For the first time in a quarter century, Africa’s economies are in recession, as real GDP growth contracted by 2.4 per cent in 2020.
They noted that 30 million people lost their jobs and slipped into poverty, as revenues plummeted while expenditures soared in response to the pressing needs of the crisis and the exigencies of climate change.
“African countries are now allocating significant proportions of their budgets to implement policies that respond to the impact of extreme weather events, including droughts, floods, crop failures, and infrastructure destruction.
“In some cases, up to 10 per cent of GDP has already been diverted towards climate-change adaptation. Our fiscal buffers are now truly depleted.
“These developments have undermined the economic outlook of several African countries, triggering credit rating downgrades in at least 12 African countries.
“Six African countries, including Sao Tome and Principe, the only African country set to graduate from Least Developing Country (LDC) status, are now in debt distress.
“For those African countries that have been successful in regaining access to capital markets, the yield spreads on their sovereign bonds are excessive, ranging from 890 to 1,710 basis points for South Africa and Uganda, respectively.
“These premium rates will increase debt burdens and threaten the future debt sustainability of our nascent economies,” the communique read in part.
Earlier, the Executive secretary of the ECA, Vera Songwe, stressed on the need for a swift, bold and positive response on Special Drawing Rights (SDRs).
She also pointed out that SDR, in the range of 500 billion to 650 billion, is now needed to arrest the devastating impact of Coronavirus on the continent.
According to her, most of the advanced countries who benefit more from SDR because of the quota system, do not need the money in the immediate.
She said most of these countries had already given themselves stimulus, but African countries need the SDR to purchase all the vaccines they need.
“It is important that the SDR goes to everybody in an equitable manner. Many countries have not been supporting as much as they should be doing,” she said.
Similarly, the ministers pointed out that based on Africa’s current IMF quota share, a new issuance would provide a maximum of SDR 33.3 billion in additional resources to Africa if 650 billion of new SDRs were issued.
They said this would barely be adequate to meet the continent’s financing needs.
To supplement these resources, the ministers requested the G7 to support an on-lending mechanism that channels, on a mutually agreed basis, SDRs to low-income and middle-income countries.
“The IMF’s Poverty Reduction and Growth Trust (PRGT) should be considered for this purpose.
“Funding the PRGT with SDRs will facilitate additional financing for urgent country priorities in light of this crisis, including the acquisition of vaccines by low-income countries.
“The SDRs can also be used to acquire vaccines and increase market re-entry access for eligible countries.
“We are conscious of the fact that new issuances of SDRs are infrequent and often contested events.
“To this end, we believe that, it is imperative that we seize the moment by leveraging these resources to power catalytic investments in Africa’s recovery.
“The SDRs must be transformative for Africa and help the continent to access the trillions of dollars needed for a green recovery. This is within reach.
“Market-based instruments, such as the proposed Liquidity and Sustainability Facility(LSF), combined with intruments like the Policy- Based Guarantee of the World Bank Group can play an important role in this respect.
“This they can do by catalysing investments, creating jobs and supporting African countries in building forward better,” they said.