Business
Africa: What is the best way to ensure the continent’s post-Covid recovery? By Alain Faujas “WE MUST REDUCE OUR DEBT,” said Senegal’s President Macky Sall. “We must focus on internal mobilisation that will favour African companies,” replied Tidjane Thiam, an international financier. “We must mobilise domestic revenue,” said Abebe Aemro Selassie, Africa director of the IMF. These statements were heard at the 20th International Economic Forum on Africa (www. oecd.org/development/africa-forum) co-organised by the Organisation for Economic Cooperation and Development’s Development Centre, the African Union and Senegal on 22 February to find ways to invest “for a sustainable recovery in Africa”. These three men are trying to come up with solutions to find the money that is sorely needed to deal with both the health crisis and the major economic crisis that Covid-19 has caused on the African continent. Their three solutions – out of the 15 others proposed – were deemed the most likely to succeed by the 600-odd people in attendance.
2021? This only amounts to a few billion dollars. What about the creation of IMF Special Drawing Rights (SDRs)? That would give $18bn for subSaharan Africa – not a huge amount in the grand scheme of things. That leaves the $365bn in African debt. A colossal burden, but barely 2% of the world’s debt, according to the Senegalese President. “Our countries are calling for substantial debt relief,” he said.
A debt-payment moratorium and special drawing rights insufficient for Sall Sall brought out the big guns. Due to their efforts to fight the pandemic while protecting the living standards of their citizens, African governments no longer have the money to revive their countries’ economies by relying on digital tools, energy or tourism, he said. What about the G20 agreeing to suspend debt obligations until June 2021 or even until the end of
Tidjane Thiam supports “domestic champions” Unlike Sall, Thiam and Abebe do not believe that the billions needed depend solely on international goodwill. A former boss of Prudential and Credit Suisse and now the founder of an investment fund, Thiam insists on the need for African effort. Attracting foreign capital, without which Africa will remain on the sidelines of value-creation chains, requires that the continent supports its companies.
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March-April 2021
Thiam
African business a Monetary F
DAWN
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