The international community would be “playing with fire” if it didn’t help Africa recover from Covid and the aftermath of the Ukraine war, said the International Monetary Fund’s director for the continent.
Failing to invest and support the continent is short-sighted and damaging to the global economy, as half of the new entrants to the global labor market over the next decade will come from sub-Saharan Africa, said Abebe Aemro Selassie, director of the Africa department the IMF’s Guardian.
“In 10 years, one in two workers will be from sub-Saharan Africa — the very children whose education has been disrupted by the pandemic,” he said.
“The human capital we need to fuel the global economy isn’t getting the attention it needs. It’s a massive collective failure,” he added.
“Almost certainly – unless we think robots will take care of everything – there will be labor shortages in most advanced economies and even elsewhere.
“Despite all the innovations we’ve had, work has shifted from one sector to another and 60-70% of the population has stayed employed.
“People will move to other jobs, but people will still work. Globally, we will need workers to supplement capital, and increasingly this labor input can only come from Africa.”
Selassie, who has worked at the IMF for 28 years, added that the victories across the continent since the 1990s – the result of national reforms, a booming global economy and generous aid and debt relief packages – have been “reversed”.
Covid, the Russian invasion of Ukraine (which has disrupted global supply chains and led to soaring commodity prices) and shrinking aid budgets have exacerbated the continent’s already ailing economy, he said.
Selassie, speaking at the 13th Andrew Crockett Lecture Governors Roundtable for African central bankers in Oxford last week, said the IMF had made $50 billion (£41 billion) available to sub-Saharan Africa in support during the pandemic since March 2020, “but its Effectiveness would still be greater if it complemented rather than partially compensated for declining support from other development partners.”
Three African countries – Ethiopia, Somalia and South Sudan – face acute food insecurity due to lack of rainfall, rising food prices and a lack of donor support.
The UK government, the fourth largest donor, has cut development spending from 0.7% of its GNI to 0.5%, resulting in a 20% cut in funding between 2020 and 2021 – from £14.4 billion to 11, £5 billion. The Foreign, Commonwealth and Development Office has also halved humanitarian aid spending from £1.53 billion in 2020 to £744 million in 2021.
Despite the difficulties Africa is facing, Selassie has “absolutely no doubt” about the future of the region, he said. “One way or another, it will evolve,” he added.
“The question is: Can we accelerate this development and prevent too many people from suffering from it?”