ADDIS ABABA, Feb. 13 (Xinhua) — Executive Secretary of the United Nations Economic Commission for Africa (ECA) Claver Gatete has called for action to reform the global financial architecture to help African countries achieve sustainable development.
The call came on Monday in Addis Ababa, the capital of Ethiopia, as the executive secretary briefed journalists alongside Zimbabwean Finance Minister Mthuli Ncube on the UNECA Conference of African Ministers of Finance, Planning and Economic Development (CoM2024) to be held in Victoria Falls, Zimbabwe, from Feb. 28 to March 5.
Gatete noted that based on the current allocation formula, the resources directed to the African continent by the International Monetary Fund, the World Bank, and others are not commensurate with its financing needs.
“The ECA believes that the international financial architecture needs to be reformed and its governance improved. Unless it is reformed, African countries will face challenges in implementing the Sustainable Development Goals and the African Union’s Agenda 2063, as most of their resources are used to pay loans,” Gatete said.
He said the international financial institutions need to provide long-term and concessional loans to middle- and low-income countries to help them invest in major development sectors, achieve better economic growth, and deal with their debt burdens. “The international financial institutions are no longer fit for purpose; they should make changes about the way they function.”
Gatete said previous pledges to mobilize 100 billion U.S. dollars for Africa have not been met. He called for more financial innovation to facilitate access to critical resources needed to invest in green economic development across the continent.
Noting that the financial institutions should mobilize resources, Gatete said the money held by those financial institutions is significantly shrinking. He further called for improving domestic resource mobilization, tax collection, and expanding capital markets as other alternatives to finance investment in Africa.
He also urged African countries to expand and promote green economic development as global warming, drought, and climate change are on the rise.
For his part, Ncube said African countries need to maximize the benefits of exporting natural resources through value addition and tax revenues by expanding digitization.
Ncube said the upcoming conference will discuss debt resolutions, governance of international financial institutions, and possible ways to finance green energy development across Africa.
CoM2024 will be held under the theme “Financing the transition to inclusive green economies in Africa: imperatives, opportunities and policy options.”
According to officials, the conference will discuss reform of the global financial architecture, green economic development, and mobilizing resources to combat the effects of climate change in Africa, among other issues. ■