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Egypt participates in 2020 African Caucus on COVID-19 recovery - Daily News Egypt

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Egypt participates in 2020 African Caucus on COVID-19 recovery

Outflow of scarce foreign exchange in Africa has to be matched by foreign investments, says CBE Governor


Egypt’s Minister of International Cooperation, Rania Al-Mashat, and Governor of the Central Bank of Egypt (CBE), Tarek Amer, have participated virtually in the 2020 African Caucus of the Governors of the World Bank Group (WBG) and the International Monetary Fund (IMF).

The meeting, hosted by Cameroon on 6 August, discussed Africa’s needs to recover from the novel coronavirus (COVID-19) pandemic.

The meeting took place under the theme of ” Protecting Africa’s Human Capital in the Face of COVID-19: Saving Lives, Preserving Well-being and Safeguarding Productivity and Jobs”.

The meeting aimed to discuss the development support Africa needs to face future shocks. At the same time, the meeting was an opportunity for African countries to present to the WBG and the IMF the challenges African countries face. 

Minister Al-Mashat’s speech was delivered on her behalf by Sherine Taha, Assistant Minister for Cooperation for International Financial Institutions and Economic Institutions. In the speech, she noted that African countries are making every effort to contain the coronavirus’ spread by exploiting all available capabilities.

This is being undertaken to reduce the pandemic’s negative impacts at the economic and social levels. Despite this, there is still an urgent need to take social protection measures, in light of the uncertainty, to ensure decent living opportunities for the continent’s populations.

The minister presented global studies issued by the African Economic Commission at the United Nations, which anticipates continent-wide growth to decrease by 1.8% according to the best scenarios and about 2.5% in the worst scenario. This would also see between 5million and 29 million people potentially returning to extreme poverty on the back of the pandemic. Additional data presented by the International Labor Organization (ILO) indicates that 19 million of the continent’s citizens face jobs losses due to the current crisis.

She explained that no country can face the pandemic alone, as the current challenges require concerted and strengthened efforts to reduce the coronavirus’ spread. Economic cooperation and integration between African countries are also required, with coordinated efforts between the African Union (AU) and international development partners more important than ever.

Amer indicated that IMF and World Bank financing for African countries does not cover the requirements for lifting the continent’s economies out of crisis. He stressed the importance of basing that financing on concrete indicators to determine the appropriate size of the required financing to achieve actual results in countering the pandemic’s effects.

Amer also stressed that the volume of financing reviewed by the IMF and World Bank during the meeting, which amounts to about $3bn, must be commensurate with the volume of imports to the African market from the developed world. This currently stands at about $549bn, reflecting the import of goods and services.

Amer noted that this outflow of scarce foreign exchange has to be matched by foreign investments. He stated that African countries consider foreign currencies a lifeline under normal circumstances, as a large percentage of this covers the continent’s food imports.

This is despite the depletion of a large percentage of foreign investments, through smuggling and other illegal activities, into safe havens.

In this regard, and on behalf of African countries, Amer called on both the IMF and the World Bank to open the door to negotiations with the Group of 7 (G7) regarding the illicit financial outflows the continent sees.

Amer also called on developed countries to change their methods of assisting African countries, to achieve effective results due to the significant rise in poverty across Africa, He stressed the importance of including Africa in the $4trn incentive package launched by developed countries.

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https://dailyfeed.dailynewsegypt.com/2020/08/08/egypt-participates-in-2020-african-caucus-on-covid-19-recovery/
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