H.E. Mahamat Moussa Faki

The Chairperson

African Union Commission

Addis Ababa

Ethiopia

 

Your Excellency

 

RE: CALL TO RECONSTRUCT A MORE INCLUSIVE AND SUSTAINABLE AFRICA IN THE POST-COVID-19 DISPENSATION

We, a group of civil society organisations working in support of the Africa Union’s Agenda 2063, present our compliments to the Africa Union Commission on this auspicious occasion of the 34th Ordinary Session of the Assembly of States, being held from the 6th to the 7th of February under the theme ‘Art, Culture and Heritage.’

Introduction

While the theme that has been raised by the AU Summit is indeed relevant, we are concerned that there is a more urgent need to focus on the impact that Covid-19 has had on the continent, especially in exposing the ravages and indecency of poverty and inequality across Africa. The pandemic has not created a new horror of inequity across the continent, rather, it has unveiled the true reflection of the gaps in our economic, social, and political structures. The health crisis has revealed the underinvestment in social infrastructure and capital accumulation that segments states and individuals alike. While, contrary to expectations, Africa has recorded a relatively lower infection and death rate than was anticipated, the discussion regarding the Covid-19 vaccine has further segregated those that can and cannot afford it.

The AU Vision 2063 projects a successful dispensation for the African populous but its realisation is pegged on a commitment to changing the current regime and charting a new course that will lead to a more sustainable and inclusive future. Africa’s leadership therefore needs to demonstrate, through policy and practice, that the re-construction following the devastating effects of the pandemic is not a return to normalcy, but a rethinking of the continent’s economic and social configuration to reflect a shift away from the contemporary norms that have embedded and exacerbated poverty and inequality.

Background

Covid-19 has been a tumultuous experience for all, but the poor continue to be ravished by the pandemic with women bearing the brunt of its impact. What is most unbecoming is that poor people have been rendered poorer and unable to access basic social services subsequently trapping them into a vicious cycle of need.

The pandemic exposed the over-indulgence and wonton consumption of the earth’s resources with no regard for sustainable development paradigms. The fact that in Africa the pandemic did not cause the anticipated health damage does not absolve its leaders from being ill-prepared to prioritise its citizens welfare. On the contrary, years of neglect have, par hazard, cushioned the continent through community health systems that have had to thrive despite deplorable conditions.

Covid-19 is poised to set the continent back years of development, not just through halted trade and investment, but also through the toll on human capital because of the health implications of the pandemic. Although across the continent millions of livelihoods have been lost, an opportunity now exists to change trajectory, shun past practice and norms, and strive towards an inclusive and shared prosperity. African leaders, therefore, have the opportunity to be at the forefront of calling out a disruptive economic configuration that preys on Africa’s resources.

Illicit financial flows (IFFs) and destructive environmental exploitation has meant that Africa is a net-creditor to the world at an egregious cost to the continent. Africa continues to be left out or disadvantaged in global negotiations while accords are reached reiterating “business as usual.”

Paradoxically, despite being a net creditor, African countries repatriate much-needed revenues to developed countries in the form of profits and debt repayments that further constrain the continent’s ability to meet essential services for its citizens, including much needed investment in social safety nets. Even with the Debt Suspension Initiative, many African countries are required to service bilateral and private sector debt that cripples their ability to respond to the pandemic effectively.

What is Needed

To ensure that the reconstruction efforts of post-Covid-19 do not replicate the pre-existing efforts to address inequality and power imbalances, it is imperative that African leaders commit towards fiscal expansion based on a just and green stimulus. This should reflect a post-Covid-19 reality that reinvigorates and triggers the Paris Agreement through robust and concrete commitments to reduce green-house gas emissions and foster natural eco-systems. These can be financed through sustainable business practices that safeguard domestic revenue mobilisation. Further, these should be underscored by transparent and accountable public finance management that balances revenue collection, responsible and inclusive expenditure, and debt management. Equally important is participation in global processes shaping domestic affairs starting from staunch positions at the Africa level reflecting context and global political positioning that is cognisant of the lived reality of African citizens and their priorities.

Core Priorities and Positions that African Leaders Ought to Take

In seeking to achieve a post-Covid-19 reconstruction narrative rooted in inclusivity, gender responsiveness, sustainability, and shared prosperity of all Africans, it is the considered opinion of the undersigned civil society organisations that the Africa Union Summit ought to embed within its 2021 resolutions the following:

  • Seek meaningful debt solutions: The financial squeeze African governments find themselves in has been worsened by the prolonged effects of the global Covid-19 pandemic. The pressures of debt repayment amidst declining revenues are forcing African governments to trade off protecting citizens from the vagaries of the pandemic in favour of paying off creditors. We, therefore, urge the Summit to strongly consider, in addition to existing debt relief measures including Debt Service Suspension Initiative (DSSI) and COVID-19 Rapid Response Facility (CRF), making a formal request to the International Monetary Fund (IMF) to approve an allocation of Special Drawing Rights (SDRs) as an additional option for addressing the challenges of financing economic recovery and procurement of Covid-19 vaccines to save African lives.
  • Call for reforms of the global financial architecture that governs public debt: The principles and mechanisms that protect debtor countries from profiteering creditors need to be revisited based on suspension, renegotiation, restructuring and cancellation. This includes considering changing of the creditor landscape and the proliferation of debt instruments available to African governments.
  • Promote taxation of the digital economy: As we move towards an increasingly digital era there is need for African countries to promote the enactment of legislation that taxes the digital economy as a source of domestic revenue mobilisation. In the wake of the digitalised economy, the AU should work towards having an agreed Africa wide taxation regime building on the work of the African Taxation Administration Forum (ATAF).
  • Seal financial leakages within the extractive section: The African Union needs to focus on closing the financial leakages within the extractives sector to ensure that Africans are able to benefit from their own resources and promote their own growth and development.
  • Commit to a comprehensive green recovery plan: There is a need to boost economies and social systems aimed at building back better from the Covid-19 pandemic, in line with the recommendations of Ministers of Environment across the African continent during the eighth special session of the African Ministerial Conference on the Environment (AMCEN) held virtually from 30th November to 4th December 2020.
  • Commit towards clear Nationally Determined Contributions (NDCs): There is a need to reduce greenhouse gas emissions and enable millions of Africans to leapfrog to clean energy access.
  • Promote progressive domestic resource mobilisation efforts: Domestic resource mobilisation is an integral component of public finance management in the post-Covid-19 dispensation should be prioritised as traditional donors and partners are increasingly beginning to look inwards to support their own populations.
  • Avoid re-establishing existing norms: Our leaders should not look to resurrecting the previous flawed economic, social and political system but rather work towards entrenching a people’s stimulus that prioritises social protection systems rather than corporate stimulus programmes.
  • Prioritise African concerns: Africa’s participation in global processes, be it economic or political, should reflect African priorities and lived experiences rather than sectarian interests that draw from developed countries leverage over Africa.

As civil society organisations we stand ready to support the leaders of the African Union in their efforts to reconstruct a more inclusive and sustainable Africa in the post-covid-19 dispensation.

Please accept, Your Excellency, the assurances of our highest regards.

Signed by:

               Tax Justice Network – Africa (TJNA)

               Christian Aid

               The African Forum and Network on Debt and Development (AFRODAD)

               Southern and Eastern Africa Trade Information and Negotiations Institute (SEATINI)

 

With copy to:

H.E. Ambassador Victor Harrison, Commissioner for Economic Affairs - Madagascar

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