Restructuring global financial architecture a way forward for Africa – Nana Akufo-Addo

•The president has said the Bretton Woods Conference created a certain global financial architecture and that must be restructured

•He called for the cancellation of Africa debts to make way for the continent's economy to grow

•He said this will help the continent to bounce back its economy post-COVID-19 era

The president of Ghana, Nana Addo Dankwa Akufo-Addo, is calling for the restructuring of the global financial architecture in order to respond to the needs of Africa and help shape the continent’s economy amidst the pandemic.

According to him, there is the need for Africa to be scrapped off all debts to enable to grow its economy in the post era of the pandemic.

Speaking at the Summit on Financing African Economies, in Paris, France, on Tuesday, May 18, 2020, President Akufo-Addo noted that, the Bretton Woods Conference, which took place as World War II drew to a close, created a global financial architecture which, over the last 77 years, has proven to be unfavourable for Africa.

“These challenges have resulted in a global economic system that has proven to be incapable of supporting lives and livelihoods, and allocating sufficient long-term resources to support Africa’s economic transformation,” President Akufo-Addo said.

The President noted that the economies of Europe, America, and Asia have grown significantly during that time, whilst those of Africa have not. He elaborated that this has attributed to collateral damage from the Cold War, inequity in the global economic system, an economic relationship built on power and resource grab, as well as leadership and governance issues on the African continent, as issues confronting the continent.

Akufo-Addo noted further that Africa’s development finance cost does not reflect its economic fundamentals, credit, or default cost, citing the case of Ghana where the country’s sovereign debt is more expensive than that of the similarly-rated Belarus, which pays someone hundred (100) basis points less than Ghana.

The structural inequities confronting African economies, the President stressed, has been worsened by COVID-19, evidenced by the fact that a mere 2% of the 1.3 billion vaccine doses administered globally, at the end of April, were in Africa.

“The pandemic has also ensured that the total fiscal deficit of Africa rose from 4.7% of GDP in 2019 to 8.7% in 2020; overall debt levels are also estimated to have increased from 57% of GDP in 2019 to 70% in 2021. Without the ‘fiscal room to breathe’, Africa could truly become ‘the forgotten continent, and that is why there is an urgent need for comprehensive debt relief and debt cancellation,” President Akufo-Addo stated.

“Just as the Bretton Woods institutions helped to rebuild the post-war global economy, and rekindled international economic cooperation, seventy-seven (77) years ago, there is now a historic opportunity to reset the global financial system’s economic rules to give African countries an equal chance at development, in the wake of the pandemic.” He added.

Meanwhile, Joe Jackson, a Financial Analyst, has stated that the decision made to call for the cancellation of Africa’s debt by President Nana Addo Dankwa Akufo-Addo is a step in the right direction.

According to Mr Jackson, most African countries including Ghana are cash-strapped due to high debts hence the calls to cancel Africa’s debt is welcoming.

“The president’s call is a step in the right direction. We are in a difficulty as Ghana and West Africa. This is exactly what we need. Ghana is broke at the moment. Going to the international community to say we should be forgiven our debt is the way to go.” He said.