In the wake of the economic downturn of African countries occasioned by the COVID-19 pandemic, the continent would need financial aid worth 7.1 trillion dollars to recover.
This was the position of Mr. Antonio Pedro, Deputy Executive Secretary, Economic Commission for Africa (ECA) at the ongoing African Economic Conference (AEC) to chart a new path for Africa’s post-COVID-19 economic recovery. Pedro said that the new deal for Africa would form part of the external funds required by Africa to, among other things, address the rising risk of African debt defaults amid COVID-19 pandemic.
“On the external front, Africa needs a new deal to recover from the ravages of the pandemic. The Roosevelt’s New Deal cost $41.7bn at the time it was instituted. Given Africa’s current population of 1.37 billion, a New Deal would have to deliver $7.1 trillion in financing to equate the US New Deal on a per capita basis. The resources required to financing a New Deal are enormous and cannot be funded exclusively through public resources. Private funding will be critical.
“Yet we are all aware of the cost of private financing is high. At the same time private direct capital investments are motivated more by economic rates of return than by social welfare considerations. Blending public financing with private resources can redirect more private investments and financing to social and other orphaned sectors through risk-sharing and risk mitigation,” he said.
