South African President and the African Union (UA) Chairperson Cyril Ramaphosa has observed that government revenues in Africa are estimated to drop in 2020 by $45 billion, from the pre-COVID forecast.
He said this depreciation would further compound African countries’ high levels of debt, which had increased to roughly $40 billion annually, driven higher by the depreciation of many African currencies in 2020.
President Ramaphosa said this on Monday in a speech read on his behalf at the official commissioning and handing over of the AfCFTA Secretariat building to the African Union Commission (AUC) in Accra.
President Nana Addo Dankwa Akufo-Addo officially commissioned and handed over the AfCFTA Secretariat building to Mr Moussa Faki, AUC Chairperson.
President Ramaphosa said in 2020, African debt is expected to increase by about 4.4 percentage points of GDP and this is likely to trigger a debt crisis and potentially a default by some countries.
He said the COVID-19 pandemic necessitated the postponement of the July 2020 start date of trade under the AfCFTA, which delayed the promise of opportunities for new exports, jobs, investments in infrastructure and financing for Africa’s development.
The UA Chairperson said the huge economic effect of the crisis had led to exchange rate depreciations and a projected decline in Africa’s GDP.
He noted that the UN Economic Commission for Africa (ECA) envisages a -2.6 per cent contraction in terms of economic growth in Africa, depriving 19 Million people of their livelihoods and pushing 29 million people into poverty.
“This pandemic has further exposed the entrenched inequalities between men and women and the plight of women and girls with regard to gender-based violence, particularly domestic violence, education, economic empowerment and financial inclusion of women and girls in Africa must be a priority,” he said.
“Therefore, there is no time to delay the right and access of women to contribute and meaningfully participate in decision making and policy development to ensure a gender responsive approach that is appropriately budgeted for in programmes targeting the development of women and girls so that no one is left behind”.
He intimated that decades of progress to raise living standards and reduce poverty had now been replaced by increasing insecurity and inequality during this pandemic; adding that the pandemic was a health, economic, and environmental problem.
President Ramaphosa said its impact on the health of the population, economic activity and social development were all interlinked, requiring them to have a comprehensive approach of inclusive and sustainable development.
He said it was regrettable that the COVID-19 had had huge implications on the upcoming Extra-Ordinary Summit of the AfCFTA, which was originally scheduled to be held in South Africa in May 2020, and had to be postponed to 5 December 2020 and the start of trading under the AfCFTA has also been moved from July 2020 to January 2021.
“However Africa is a resolute continent. Today bears testament to our tenacity to rise in the face of adversity. Together we will emerge stronger in a post-COVID-19 era to usher in prosperity and development in the African continent,” he said.
“The road to economic recovery may be long and pose many challenges. But we are ready to tackle and overcome any adversity when we act together.”
Mr Wamkele Mene, Secretary General of the AfCFTA, said the establishment of the AfCFTA, signals that Africa was opened for business and mutually beneficial investment thereby creating decent jobs and improving livelihoods.