Countries in Africa are being saddled with abusive costs of borrowing on the international capital markets to the benefit of their European and North American counterparts, President Nana Addo Dankwa Akufo-Addo has observed.
“Profits from our resources have benefited foreign creditors for far too long while we suffer abusive pouring costs on the international Capital markets”.
“There is no basis for our economies being saddled with the so-called African risk premium which translates into higher spreads for our European and North American counterparts, particularly when our resources were the catalyst for the economic advancement of Western nations,” he said.
Speaking at the opening of the Annual General Meeting of the African Development Bank (AfDB) in Accra yesterday, the President said the time had come for Africans to move towards an economic model which served their own interest, not others.
The meeting, held on the theme “Achieving climate resilience and just energy transition in Africa”, was attended by the President of Mozambique, Filipe Nyusi, the President of Tanzania, SamiaSuluhu Hassan, bank governors and finance ministers of countries on the continent.
The participants from 52 African countries shared the climate change and energy transition challenges their countries faced and discussed policy responses to collectively tackle the challenges.
The discussions also focused 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.
President Akufo-Addo called for the removal of structural barriers to development on the continent and urged countries to cut relations with multinationals who dodge taxes and engage in illegitimate commercial transactions.
“We must also deal with tax dodging and illegitimate commercial transactions by multinationals, which account for 60 per cent of the 88 billion United States dollars which account for illicit financial outflows from the continent annually, and other relationships that inhibit our development,” he said.
He stressed the need for African leaders to collectively build the capacity of continental development banks to transition the continent towards becoming resilient.
Touching on climate change, President Akufo-Addo said Africa bore a disproportionate burden of the cost of climate around the world, although the continent caused the least emissions of 3.8 per cent, with western nations responsible for over 70 per cent.
“Yet only US$6 billion, out of the worldwide total of US$30 billion of climate adaptation finance flows to Africa,” he said and stressed the need for AfDB to empower African countries to exploit the abundant natural resources on the continent to seek clean energy.
“We must light up and power Africa to enable her to feed herself, integrate and industrialise. We must ensure that our prioritized climate access is consistent with our current challenges and aspirations as a continent,” he said.
The President of AfDB, Dr Akinwumi Adesina, in an address, highlighted some of the projects financed by the bank in Ghana, including the expansion of the Kotoka International Airport and the four-tier Pokuasi 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 for the prudent management of funds from AfDB.
He said the AfDB 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.