Africa accounts for more than half of world’s poor, says UNECA

AUTHOR:

Wasilat Azeez

Hanan Morsy, chief economist, United Nations Economic Commission for Africa (UNECA), says Africa currently accounts for more than half of the world’s poor.

Morsy spoke at the 55th session of the conference of African ministers of finance, planning, and economic development in Addis Ababa, Ethiopia, on Monday.

“The continent faced a tsunami of global shocks that have exacerbated existing socio-economic operation and equity,” Morsy said.

“Africa, as a result of these shocks, currently accounts for more than half of the world’s poor at 54.8 percent.

“And we have estimated 548 million Africans living in poverty in 2022 and 149 million at risk of falling into poverty in the same year.

“There is a skewed distribution across the continent in terms of concentration of these issues, with particularly East and West Africa having a higher share of poverty across regions.”

Morsy said the situation was further exacerbated by existing inequalities, adding that even in times of high economic growth in Africa, the rate of inequality still rose.

She explained that several recommendations, both domestic and international, had been put in place to help tackle poverty.

“We need to pursue inclusive macroeconomic policies such as targeted and efficient spending and build resilience to future shocks at the household and community level,” Morsy said.

“African governments need to enhance resource mobilisation. To do that. I think several measures would help, including closing tax loopholes.

“Africa loses 40 to 60 billion dollars annually in tax evasion. There’s also funding that can be raised through tackling issues of illicit financial flows.”

The economist said there is a need to enhance Africa’s regulatory framework and reform its global financial architecture.

“Another critical issue is scaling up affordable and long-term financing for development. And that would involve improving the terms of lending,” she said.

“Increasing the flexibility and the alleged poor eligibility and selection qualification criteria of the IMF resilience and sustainability facility is essential.

“Enhancing the regulatory framework for credit rating agencies to have better transparency in terms of methodology, rating processes and an oversight and external recourse mechanisms in case of dispute is key.”

Morsy said to ensure continued market access, African countries need more lending options, official support and guarantees to enable them to tap capital markets at affordable rates.

The Cable