39 million people may fall into poverty in 2021-AfDB

The African Development Bank (AfDB), has warned that another 39 million people on the continent could fall into poverty at the end of 2021.

President of the AfDB, Dr. Akinwumi Adesina said at the ongoing virtual Africa Singapore Business Forum that the 39 million people could pass on as an added number to 30 million individuals already rendered poor by the COVID-19 pandemic.

According to him, the “people impact” is the worst negative consequence of the pandemic, with 30 million jobs lost and inflation spiraling out of control.

“The debt also began to accumulate. The debt to gross domestic product (GDP) went up to between 60 and 70 percent. But that is just on the financial side. I am more bothered about the people impact,” he noted.

On the bright side, he said 85 percent of operators in the special economic zones of Africa believed that the foreign direct investment (FDI) flow to the continent would rise significantly again while 90 percent outside Africa believed the same.

Adesina said Africa holds the key to the global economy with enormous opportunities for return on investment (RoI), stressing that those who do not invest in Africa would probably not invest at all. He added that the continent has improved tremendously in the ease of doing business.

However, poor infrastructure has blighted the potential of the continent’s economy but recent investments by AfDB and other stakeholders are reversing the story, he said, and called for “resilient and quality” infrastructure to make Africa truly attractive to the rest of the world.

Singapore’s Increased Investment

While the rest of the world slowed down in their investment in Africa, he said, Singapore has increased in that regard. He said the African Continental Free Trade Agreement (AfCFTA) provides huge opportunities to Singaporean companies to expand their footprint in the regional market.

Singapore’s Senior Minister and Coordinating Minister for Social Policies, Tharman Shanmugaratnam, who joined Adesina on th panel, said public sector reform was an urgent and necessary action plan to leapfrog Africa’s economy.

Shanmugaratnam said there were huge opportunities in digitisation and education for Singapore and Africa to explore as they scale-up their relations.

He pointed out that innovation, in every sphere of the economy, would help Africa to reduce the cost of business operation and make it more efficient, noting that Singapore would support Africa in achieving innovation and energy efficiency.

The minister said the small and medium enterprises sector (SMEs) need incentives to help them export to the rest of the world. Credit, he said, “is very important to achieving this”. In doing this, he said, an innovation that will increase banks’ ability to assess the creditworthiness of SMEs would necessarily be put in place.

Guardian/Hauwa Abu