ECA chief calls for reform of global financial architecture to help Africa

by MMC
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This photo taken on May 16, 2023 shows the landscape of Victoria Falls, Zimbabwe’s main tourist destination. (Xinhua/Zhang Baoping)

The Executive Secretary of the United Nations Economic Commission for Africa (ECA), Claver Gatete, has called for measures to reform the global financial architecture to help African countries achieve sustainable development.

ADDIS ABABA, Feb. 14 (Xinhua) — Claver Gatete, executive secretary of the United Nations Economic Commission for Africa (ECA), has called for measures to reform the global financial architecture to help countries Africans to achieve sustainable development.

The call took place on Monday in Addis Ababa, the capital of Ethiopia, as the Executive Secretary briefed journalists alongside Zimbabwean Finance Minister Mthuli Ncube on the ECA Conference of African Finance Ministers , Planning and Economic Development (CoM2024) which will be held in Victoria Falls. Zimbabwe, from February 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 must be reformed and its governance improved. Unless reformed, African countries will face challenges in implementing the Sustainable Development Goals and the African Union Agenda 2063, as most of their resources are used to pay loans “Gatete said.

He said international financial institutions must provide long-term concessional loans to middle- and low-income countries to help them invest in key development sectors, achieve better economic growth and address their debt burden. . “International financial institutions are no longer fit for purpose; they should change the way they operate.”

Aerial photo taken on February 15, 2019 shows the Chinese-funded Garissa Solar power plant in Garissa County, Kenya. (China Jiangxi Corporation for International Economic and Technical Cooperation/Handout via Xinhua)

Gatete said previous promises to mobilize US$100 billion for Africa had 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 financial institutions should mobilize resources, Gatete said the money held by these financial institutions was decreasing significantly. He further called for improving domestic resource mobilization, tax collection and expansion of capital markets as other alternatives to finance investments in Africa.

He also urged African countries to expand and promote green economic development as global warming, drought and climate change worsen.

For his part, Ncube said African countries must maximize the benefits of exporting natural resources through value addition and tax revenue by developing digitalization.

Ncube said the upcoming conference will discuss debt resolution, governance of international financial institutions and possible ways to finance green energy development in 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, among other issues, reform of the global financial architecture, green economic development and resource mobilization to combat the effects of climate change in Africa.

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