According to experts, Africa was not present when the global financial architecture was put in place, and the Bretton Woods agreements, which drew up the broad outlines of the international financial system, are out of date for its development. In terms of climate financing, for example, with only 30 billion dollars received against a need of 277 billion dollars a year to tackle climate change, it is clear that the current architecture does not meet the continent’s requirements. All the more so as the countries hardest hit by the effects of climate change are in Africa.
Africa is being left behind in the global financial architecture, a fact underlined by Emmerson Mnangagwa, President of SADC, who insists on the need for reform to ensure optimal results. In his view, Africa’s challenges, particularly in the areas of debt resolution and climate financing, require greater global attention and appropriate financial instruments.
“Informed by experience and the lessons we have learned along the way. Key in this respect is that conservation must be inclusive, engaging governments, local communities, researchers and the private sector.”
Emmerson Mnangagwa, President of the SADC – Zimbabwe
On the question of debt, according to a UNDP study, African countries could save up to 74.5 billion dollars if their credit ratings were based on less subjective assessments. This financial windfall would enable them to repay the principal on their domestic and foreign debts, freeing up resources for investment in human capital and infrastructure development. Another element of the global financial architecture that does not meet Africa’s specific needs is climate finance. The continent currently receives 30 billion dollars to meet its climate challenges. This is not enough to meet the estimated annual needs of 277 billion dollars.
“Excellencies, climate change is exposing the vulnerabilities of all communities, as well as livestock and wildlife. The need to strengthen food security cannot therefore be overstated. The importance of adequate water supplies for animals in their habitats will also help to prevent encroachment on our communities.”
Emmerson Mnangagwa, President of the SADC – Zimbabwe
For Emmerson Mnangagwa, there is a need to unlock private capital for development, as public finances alone cannot fill the continent’s investment gap, estimated at between 100 and 150 billion dollars a year.
“By the same token, robust and responsible social economic models must be developed so that the financial benefits of this sector accrue to broader aspects of grassroot development, while at the same time building resilience and empowering communities within our countries..”
Emmerson Mnangagwa, President of the SADC – Zimbabwe
With a view to unlocking the continent’s transformational potential, the African Development Bank believes it is crucial to close an annual financing gap of around $402 billion by 2030, and recommends prioritising investments in education, energy, productivity enhancement and infrastructure.
