Replenishing Africa’s Development Fund: A Time for Ambition
The stakes are high for the African Development Fund (AfDF) as it kicks off its replenishment fundraising exercise this spring. Countries in sub-Saharan Africa (SSA) are still grappling with the health and economic fallout of the COVID-19 crisis, with over 30 million of their citizens pushed into poverty since the onset of pandemic. According to the IMF, an extra $425 billion in SSA government spending will be needed over 2021-2025 to make up for the lost ground in the fight against poverty. African countries are also strongly impacted by the war in Ukraine, including through higher food and energy prices. Ninety percent of East Africa’s wheat imports, for example, come from Russia and Ukraine. Debt dynamics in the region are increasingly precarious, with nearly half of sub-Saharan African countries in or at a high risk of debt distress. We anticipate increased volatility in capital flows to the region as global monetary conditions tighten. And accelerating climate change disproportionately threatens sub-Saharan Africa, a region that produces less than 3 percent of global emissions but is home to a third of the world’s droughts.