The African Union is calling for the creation of a pan African credit agency.
The chair of the union, Senegal President Macky Sall says the current international credit ratings are proving to be unjust to African countries.
The continent is seeking new and urgent sources of financing as the impact of the Ukraine conflict threaten to worsen an already dire economic situation caused by COVID-19.
Finance from the continent are in Dakar where they are deliberating on how to fix Africa’s tough financing gap.
President Sall says some African countries are failing to recover economically because low credit ratings are discouraging international trade and investment.
“The ratings pose a problem in terms of the perception of the risk which is greater in terms of what is real and this makes credit more expensive and therefore undermines our competitiveness.”
He says Africa must review its relationship with international financial institutions that he terms as having “arbitrary conditions on Africa ”
“We are not really talking about aid, we are talking about partnerships for Africa at least to improve those conditions for loan access and credit market access at the same conditions that are being reserved for those developed countries ”
The president was adding his voice to that of the council of ministers meeting in Dakar.
They are asking the International Monetary Fund (IMF) to give countries more time to repay their loans and also suspend the debt of others .
The AU is also asking that the IMF considers availing new lending facilities for Africa targeted specifically at assisting the continent get liquidity urgently. This in addition to demand that Africa gets up to 650 billion dollars in special drawing rights.
But even with push for external funding, the UN Economic Commission for Africa (UNECA) says because of COVID-19 and now the impact of Russia and Ukraine conflict, poverty levels are increasing on the continent.
“We must increase and strengthen domestic resources. How can we do that? We have already spoken on many occasions about that, but we haven’t succeeded in getting to 30% of internal revenue mobilization but now we see that here are opportunities. With digitalization, we are talking about Egypt, Ghana, Zimbabwe, Mauritania, Burkina Faso countries have already begun seeking the advantages of this digital economy,” says Executive Secretary of UNECA Vera Songwe.
Civil society insists that the finances being sought must prioritise young people.
“Every year between nine and 12 million people come into the job market in the continent but only about three million are covered by the institutions that exist. So the other fall into unemployment or indecent employment so it is important that ministers commit to create more jobs for African people, “says Francophone Africa One Campaign Director Desire Asogbavi.
Some delegates here are asking the African Union to push to be a member of G20 so that the continent can have a stronger voice in determining access to financing.
But that’s an idea that will need to gain more traction before it becomes a reality.