Panellists at the ongoing 2021 African Economic Conference (AEC) say tackling illicit fund outflows, improving management of indigenous resources and investment in human capital can help rebuild Africa following the COVID-19 pandemic.
The panellists who are economic policy makers said that urgent reforms were needed to help rebuild the continent.
The 2021 AEC, which is the 16th edition of the conference is being held in a hybrid format, with key delegates gathering in the Cabo Verde island of Sal as well as virtually.
Mr Olavo Correia, Cabo Verde Deputy Prime Minister and Minister of Finance, said at a ministerial dialogue on leadership that it was up to African leaders to build solid institutions that would stop illicit financial outflows and money laundering.
“The money from Africa needs to serve primarily the African continent. That is the best way to contribute to the financing of the African continent in the wake of the pandemic,” he said.
He referred to the African Development Bank (AfDB) estimates that African governments require additional financing of about 484.6 billion dollars within the next three years to close the financing gap and emerge more resilient from the COVID-19 crisis.
Correia supported calls for the renegotiation of debt to ease the devastating impact of the pandemic on developing nations.
He cited Cabo Verde’s economy’s reliance on migrant remittances and services such as tourism, adding that 60 per cent of the country’s fiscal revenues go to servicing debt.
“We cannot have an economy that works only to pay its debts, solutions should go beyond debt pardons.
“Governments must also be rational in their public expenditures and account to the people for each dollar spent”, Correia added.
Beyond a debt moratorium, African countries need to restructure and re-organise their external debts, he said.
He also said that the debt problem was better solved internally through increased tax collection, while citizens must be guaranteed the transparent use of resources collected.
Nicolas Kazadi, Finance Minister of the Democratic Republic of the Congo, called for higher investment in human capital to create sustainable wealth.
According to him, Africa must use the experience of the COVID-19 crisis to re-launch economic growth by working with the private sector and development partners.
“We must enable the private sector to act and reduce poverty, the public sector should act as the catalyser.
“Our institutions cannot stand for only peace and security but also for growth and development,” he said.
Kazadi added that technology was also there to help Africa.
“I cannot have an inspector behind every tax payer, but profile their travel, shopping, income, everything is registered and the state can intelligently manage information and lessen tax evasion.”
Regarding the recent new Special Drawing Rights (SDR) allocations by the International Monetary Fund (IMF), Kazadi encouraged countries, particularly rich and developed ones, to redistribute their portions to poor countries that desperately need help.
The panel agreed that African countries needed to diversify to better face future challenges, adding that the continent also needed a voice in global and international financial institutions.
It also agreed that there was a need for African states to dialogue among themselves and integrate solutions as this would allow them to reduce poverty.
The AEC, taking place both physically and virtually, was organised by AfDB, Economic Commission for Africa (ECA) and United Nations Development Programme (UNDP).
It brings together a wide range of stakeholders, including policymakers, development institutions, the private sector and researchers, to discuss ways to sustainably grow the continent’s development funding sources.