Ministers from various African countries say the spike in prices of imported goods is starting to affect the quality of life for many of their citizens in addition to the effects of the global COVID-19 pandemic on these countries.
The African Finance Ministers met on the sidelines of the IMF-World Bank Spring Meetings in New York which ended over the weekend.
The effects from the Russia-Ukraine conflict are seen seeping through the cracks in Sub-Saharan African countries.
Finance Ministers from Gambia, Tanzania, Malawi and Liberia say they are steadily feeling the impact on their inflation, due to increases in the fuel price.
They say the Spring Meetings came at a time when the countries are still grappling with the effects of the COVID-19 pandemic.
Like South Africa, Minister of Finance in Malawi, Alfred Gwengwe says it is also facing rising cooking oil prices. The country says it is now encouraging local production to alleviate the impact.
Gwengwe says, “Cooking oil prices continue going up in our budget that was passed a few weeks ago. On the 1st of April we did try to remove some VAT on cooking oil plus the raw materials as a way of trying to cushion the people and the skyrocketing cooking oil prices as it is. But if the world goes to more restrictions, it’s going to be another shock which we anticipate, so meanwhile we are encouraging local production.”
Many thanks to members of the African Consultative Group for joining us at the @WorldBank Group Spring Meetings – glad to hear attendees’ thoughts on how to address key issues across the continent.
My remarks: https://t.co/lsrBDXBCdD pic.twitter.com/PPgGYVDs66
— David Malpass (@DavidMalpassWBG) April 23, 2022
Finance Minister Samuel Tweah says Liberia is currently faced with a debt crisis, one that the country is looking at managing. But Minister Tweah says he hopes that the Spring Meetings will help in averting looming sovereign downgrades from the ratings agencies.
Tweah says, “Liberia is at moderate risk of eternal debt and high risk of total debt, I think we join the chorus on looking at how we address Africa’s debt problem, particularly as this is a private sector challenge [as well].”
As African countries continue to increase their social spending in efforts to cushion the impact on the vulnerable. They say they have no choice but to turn to the World Bank and the International Monetary Fund for short-term relief.
“In Liberia for example, in Gambia and all the countries here we are losing revenue to cushion the impact on the poor. So for example the share of our SDR re-allocation is really to look forward to sustaining the private sector investment for infrastructure, if we use some of that to than deal with the current shock. It means we may have to turn to the IMF and the World Bank to kind of bolster the short-term impact,” says Tweah.
Many African nations fear that the rising energy prices could trigger social unrest. Another major challenge is the infrastructure deficit that’s making it hard to grow their nation’s economies.
Conflict, COVID-19 & climate change have created unprecedented challenges for developing countries. How can we build a more #ResilientFuture?
Watch the event replays of our Spring Meetings where leaders and special guests discussed. https://t.co/eb4AQeG2FG pic.twitter.com/DqgJyYqAUT
— World Bank (@WorldBank) April 23, 2022