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Ph/DR: Hanan Morsy, Deputy Executive Secretary of ECA
The Deputy Executive Secretary and Chief Economist of the Economic Commission for Africa (ECA), Hanan Morsy, called for continued collective action in support of the African High Level Task Force on the Global Financial Architecture ( HLWG).“Our main objective is to build an African consensus on what needs to be done and to amplify the voice of the continent on the world stage,” said Mr.me Morsy, adding: “The work of this Group (HLWG) shows that it is possible to move mountains when we act together”.
Mme Morsy co-chaired the HLWG with African Union Commissioner Albert Muchanga and Ghana’s Finance Minister Ken Ofori-Atta. on the sidelines of the annual meetings of the African Development Bank (AfDB) in Sharm el-Sheikh, Egypt, Mrme Morsy lamented the high cost of debt incurred by African governments. “Debt service represents 22% of revenue” in Africa, which limits the ability of countries to make essential investments in health, education and infrastructure to help implement the AfCFTA”.
Mme Morsy stressed the urgent need to reform the global debt architecture so that over-indebted countries can achieve rapid and effective debt restructuring. The ECA Chief Economist highlighted some of the short-term reform proposals presented by the HLWG, including the need to suspend debt service for all countries entering the Common Framework restructurings to provide relief and to encourage rapid restructuring; extend eligibility to middle-income countries; establish expanded creditors’ committees to include private sector creditors, iron out coordination issues, and accelerate restructurings; establish a “comparability of treatment” formula to reduce technical disputes and further accelerate restructuring; and finally to use the IMF’s arrears policies more boldly to reduce the leverage of unwilling creditors.
Credit enhancement tools and collateral facilities would also help unlock more resources for investment, she noted. Such mechanisms can be combined with swaps of debt for climate investments, which reduce countries’ debt servicing costs and create fiscal space.
Mme Morsy urged stakeholders to rally behind a proposal by AfDB and the Inter-American Development Bank for the redirection of Special Drawing Rights (SDRs) through multilateral development banks. “This will increase the leverage of SDR resources and provide much needed liquidity,” noted Mr.me walruses.
The meeting was chaired by AfDB President, Akinwumi Ayodeji Adesina, who commended the work of ECA and HLWG, adding that “On the issue of debt settlement, AfDB and ECA will continue to work very hard. to ensure that Africa speaks with a ‘common voice’.
The meeting brought together more than 18 heads of African regional and continental institutions.
The African High Level Working Group on the Global Financial Architecture (HLWG) is coordinated by ECA and includes African Ministers of Finance, Planning and Economic Development, African Union, African Development Bank, Afreximbank and the World Bank; IMF staff and executive directors also participate. The Group serves as a forum to develop proposals for reforming the global financial architecture and strengthening Africa’s voice on the global stage.
About ECA
Created in 1958 by the Economic and Social Council (ECOSOC) of the United Nations, ECA is one of the five regional commissions of the Institution and has the mandate to support the economic and social development of its member States, to encourage regional integration and promote international cooperation for Africa’s development.
Comprised of 54 member states, the Economic Commission for Africa (ECA) plays a dual role as a regional body of the United Nations (UN) and as an integral part of the regional institutional landscape in Africa.
