President Nana Addo Dankwa Akufo-Addo has called on African leaders to deal with the canker of tax evasion and illegitimate commercial transactions by multi nationals, which account for over US$50 billion of illicit flows from the continent annually.
“We must also deal with “tax-dodging” and illegitimate commercial transactions by multinationals, which account for sixty percent (60%) of the eighty-eight billion dollars (US$88 billion) of illicit financial flows from the continent annually and other relationships which inhibit our development,” he said.
The Ghanaian President was speaking at the opening of a 4-day annual general meeting of the African Development Bank (AfDB), currently ongoing in the capital, Accra.
African Risk Premium
According to the President, the time has come for the continent to move towards an economic model which serves its interests, not others. He said that profits from resources of Africa had benefitted foreign creditors for too long, while the continent suffered abusive borrowing costs on the international capital markets.
He said that there was no basis for Africa’s economies being saddled with a so-called “African Risk Premium” which translates into higher spreads than for European and American counterparts.
His argument was on the basis that it was the resources of Africa that were the catalysts for the economic advancement of Western nations, adding that “it is time we worked to address the structural barriers to our development.”
Sense of urgency
Speaking about the AfDB, President Akufo-Addo said that the combined effects of the debt situation, rising interest rates and cost of living were resulting in severe macroeconomic and financial instability.
He observed that what was clear was that the resulting damage could not be cured so easily with the limited fiscal tools at Africa’s disposal and national policy adjustments.
Therefore, he reiterated his call for an elevated role for the AfDB, but this time, asked for a sense of urgency due to the mutual enlightened awareness.
Sustained Transformation
The AfDB has an active portfolio of some $61 billion in more than 142,000 locations. This record, President Akufo-Addo asserted, places the bank in a position to drive sustained transformation in Africa.
In that spirit, he was happy to learn that the AfDB Board had approved funding for the $1.5 billion Africa Emergency Food Production Plan to support countries to produce food rapidly, while delivering climate-resilient agricultural technologies to 20 million farmers and thus leveraging this facility over eight times.
President Akufo-Addo was encouraged to hear that the ‘right noises’ were being made towards establishing an African Financial Stability Mechanism to protect its economies from future shocks.
He further stated that the irony that Africa had a history riddled with economic shocks, but were the only continent in the world without financial buffers, had to be urgently remedied.
“I am persuaded that the African Financial Stability Mechanism will provide such protective cover for our economies, thus enabling us to counter effects of future pandemics amongst others,” he remarked.
Clean Energy
Meanwhile, President Akufo-Addo wants the bank to empower Africa to seek justice in the journey to clean energy in a manner that optimises the exploitation of its abundant natural resources.
He said the design and focus of a just energy transition facility was timely, as they offered material support for powering and lighting up Africa, and still meet the targets of climate.
He encouraged the people to light-up and power Africa to enable her feed herself, integrate and industrialise and also ensure that the prioritised climate actions were consistent with the current challenges and aspirations as a continent.
The AfDB Meeting
The meeting, being held on the theme “Achieving climate resilience and just energy transition in Africa” had the President of Mozambique, Filipe Nyusi, the President of Tanzania, Samia Suluhu Hassan, bank governors and finance ministers of countries on the continent gracing the opening yesterday.
Participants from 52 African countries have, from yesterday, being sharing the climate change and energy transition challenges their countries faced and discussing policy responses to collectively tackle them.
The discussions for the meeting will also focus on how to boost funding for climate adaptation as well as Africa’s need for increased investment and other forms of financing to accelerate climate adaptation efforts.
AfDB President
The President of AfDB, Dr Akinwumi Adesina, in an address, said the bank needed greater resources to deliver more projects in the country and deliver lower concessional lending rates to countries.
He, therefore, stressed the need for the African Development Fund to use its accumulated equity of US$25 billion to leverage US$33 billion from the capital markets to support projects on the continents.
He highlighted some of the projects financed by the bank in Ghana, including the expansion of the Kotoka International Airport and the four-tier Pokuase Road Interchange in Accra.
“Ghana used the funds very well. Monies that were used to do a three-tier interchange were stretched and used to do a four-tier interchange; that is what you do.
“At the AfDB, we deliver great value for money,” he said and commended President Akufo-Addo and the Minister of Finance, Ken Ofori-Atta for the prudent management of funds from AfDB.
