Victor Ezeja
AdminThe United Nations Economic Commission for Africa (ECA) has identified climate change-induced shocks, the repercussions of the COVID-19 pandemic and the ripple effects of the Russian invasion of Ukraine as the polycrises that is causing Africa to regress or stagnate on the Sustainable Development Goals (SDGs) targets.
In a report titled “Building Africa’s Resilience to Global Economic Shocks” which focuses on the impact of multiple and recurring global shocks on African economies, ECA examined how these shocks undermine Africa’s prospects of attaining targets set in the SDGs and how to achieve inclusive economic transformation and build resilience.
Prime Business Africa recalls that the sustainable development goals were adopted by all United Nations Member States in 2015 to end poverty, reduce inequality and build more peaceful, prosperous societies by 2030.
Over the past few decades, economic performance has been shaped by varying magnitude, duration, and recurrence shocks.
More than 30 million Africans were forced into extreme destitution in 2021, and 22 million jobs were lost. The ongoing war in Ukraine prolongs uncertainty and fears of food insecurity in Africa, and internal conflicts and risks have left several African countries more vulnerable and less resilient to manage current and future shocks.
The multiple shocks have also had scarring effects that make it difficult for African economies to recover fully, even after a short-lived shock such as the global financial crisis. More importantly, their damage could morph into other domains, such as political instability and conflict, thus undermining recovery and resilience to future shocks.
According to the report, “Given the external nature and depth of these polycrises, growth and fiscal space in many African countries remain constrained.
“Combined with an overstretched resource envelope to mitigate Covid-19, low productivity in agriculture, and persistent trade barriers in the region, financing for recovery has become increasingly difficult. And countries are struggling to find the resources necessary to respond to shocks. The level of debt in developing countries has increased, and the cost of borrowing has risen.”
The report, therefore, advocated new approaches for African countries to address challenges of global economic shocks. It called for improving risk management and building resilience strategies through well-designed national development plans and good governance, as well as structural transformation through equitable green growth and smart industrial strategies.
The report also proposes developing robust resource mobilization strategies to finance sustainable development. These strategies include strengthening the tax system, stemming illicit financial flows, establishing verifiable measures to improve debt management, diversifying financial instruments to finance long-term investment and reforming the global financial architecture to ensure a more equitable and representative international system.
“Forging a new global cooperation framework and accelerating the African Continental Free Trade Area (AfCFTA) could enhance collaboration and integration among African countries, enabling risk pooling and management.
“The continent must also implement pandemic prevention and early warning systems to face future shocks and build resilience,” the ECA report added.
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