Liberia’s Finance and Development Planning Minister, Hon. Samuel D. Tweah, Jr. has called for a more “meaningful and radical” approach to change the investment and development trajectory in Sub-Saharan Africa.
Minister Tweah made the call on Tuesday, September 29, 2020 when he spoke at the 2020 US-Africa Investment Forum and Policy Dialogue.
The two-day virtual conference organized by the African Leadership Magazine was held September 29-30, 2020 under the theme “A NECESSARY REALIGNMENT“. The forum brought together policymakers, private sector leaders, industry titans, civil society leaders, and stakeholders with the aim of soliciting their expert thoughts relevant to shaping a new future for our common good.
According to the African Leadership Magazine, ’’ The US-Africa Investment Forum and Policy Dialogue provides ample opportunities to shed critical light on how US-AFRICA relations can potentially impact investment and other development outcomes in Africa”.
Making his presentation at the start of the forum, the Finance and Development Planning Minister underscored that due to the severe global economic impact of the pandemic, world leaders, economists and policy experts were already having different discussions at various forums on the significance of framing a new and different economic consensus, which according to him, can deliver results that might enable countries particularly low income and developing countries to better withstand the shocks from the economic crisis.
“World leaders, heads of international organizations, think-tanks, economists and policy experts are chattering loudly at various conferences, in various forums and discussion groups on the importance of framing a new and different economic consensus that can deliver results that might enable countries, particularly low income and developing countries, to better withstand the shocks from economic crises with orders of magnitude significantly greater than the Great Recession of 2008, or from global health pandemics whose impact might dwarf the impact of the Spanish Flu of 1918, which took more than 50 million lives and affected more than 500 million people.”
Speaking further, Minister Tweah lamented that when the Ebola Virus Disease outbreak affected Liberia, Guinea and Sierra Leone in 2014, “the world largely saw Ebola as an African problem or a West African epidemic”.
He added, “The three countries were largely left to their own devices in dealing with the economic aftershocks of Ebola. The Liberian economy plunged to a GDP growth rate of negative 2. 17 percent; recovery from which has been buffeted by subsequent macroeconomic headwinds and now by the Corona pandemic.
While the three countries received billions in emergency assistance, their respective healthcare delivery systems remain unable to cope with any serious epidemic, and their respective economies have never received any serious post Ebola economic or investment stimulus to compensate for the impact from Ebola.”
The Liberian Finance Minister told the virtual forum that the Fifth US-AFRCA INVESTMENT FORUM AND POLICY DIALOGUE avails a fresh opportunity to explore the horizons and possibilities of changing the investment and development trajectory in Sub-Saharan Africa.
Minister Tweah reflected on the “momentous events” the world has seen over past seventy five (75) years since the end of the Second World War and the “tremendous changes they have wrought on our world”.
He mentioned: the Vietnam and Korean Wars; the onset of the Cold War and its demise with the fall of the Berlin Wall in 1989 and the end of Soviet Communism; the plunging of Africa into nearly two decades of violence and conflicts under the aegis of brutal dictatorships, as well as also seeing the continent climb from these maladies to the post-millennial era of democracy and economic growth, even if the growth has been sporadic in different regions.
He also revealed that “during these decades, we have seen China rise from a per capita GDP of 185 US dollars in 1977, to a per capita GDP of nearly 10,000 US dollars in 2018, lifting more than 700 million people out of poverty in the last four decades, the greatest poverty alleviation feat in recorded history! We have also seen Latin America and the Caribbean move from a per capita GDP of about 1400 US dollars in 1977 to about 8500 US dollars in 2019.”
However, he said “despite these seismic events and the changes they have engendered, Africa has changed very little. Per-Capita GDP in Sub-Saharan Africa moved from USD 462 in 1977 to a meager USD 1500 in 2019. This means Africa is presently where Latin America was more than 40 years ago.” He added, “ in the last four decades, Africa has made some progress but has remained in virtually the same place.”
Minister Samuel D. Tweah, Jr., told the gathering that “an abundance of economic evidence and analyses have purported to show why Africa has not grown and developed as fast as or as much as other continents or regions, and why the continent remains at the bottom of the economic ladder”.
“The reality emerging from all these analyses”, he said, “is that global investment capital has not flown into Africa in the way it has flown into other regions of the world.”
The Liberian Fiscal Boss acknowledged economic theorists who suggest that Africa’s limited amount of investment capital into the continent is due to quality of institutional governance (including: effective property rights, investment friendly policies and regulatory frameworks, strong anti-corruption governance and a stable and predictable policy environment).
He however argued that this lack of capital flows, which explains Africa’s lack of infrastructure development, without which the continent’s private sectors will be left in the lurch, cannot alone be explained by institutional factors of empirical studies.
For example, Sub-Saharan Africa’s share of Public Private Investment is the lowest in the world and is concentrated in four countries— South Africa, Nigeria, Kenya and Uganda. According to him, this fact may appear to suggest that these countries are the best on global indices of Government effectiveness, regulatory quality or anti-corruption.
Minister Tweah opined that “the most fundamental critique of the current economic or investment consensus is that while it has identified the lack of capital and investment flowing into Sub-Saharan Africa as a major culprit, enabling or catalyzing these flows has not occupied a particularly high niche in the drive for global solutions”.
“So the menu of options for Post-COVID-19 Social and Economic rethinking and paradigm redefining must be as rich and nuanced as it must be complex”, said Finance Minister Samuel D. Tweah. Jr.
Towards this end, he advanced the following recommendations:
1) The challenge of private investment must assume center stage within Breton Woods multilateralism.
2) We must begin to perceive Africa debt vulnerability as the immediate consequence arising from a combination of the inefficiencies in public infrastructure spending, from weaknesses in the bankability of large public investments, from the lack of private investment and from anemic and sporadic growth.
3) Countries must continue to work aggressively on improving the quality, stability and predictability of institutional governance.
4) Sub-Saharan Africa must continue to ramp up anti-corruption governance.
5) We must change the way we have delivered development assistance.
6) Governance on natural resource management in African countries must take on the challenge of value-addition in the extractive industries and
7) The post-COVID-19 must place at the disposal of developing countries the ability to recover more sustainably from economic crises or from global health pandemics.
Meanwhile, Minister Tweah has praised the great and exemplary role of the United States of America “in preserving world peace and upholding the economic consensus that issued from the Second World War.” He expressed the confidence that America can impart a new sense of mission to galvanizing a new consensus that will reverse Africa’s investment woes.
The Minister further stated that the US-Liberia relationship will play a key role in bending the arc of development in Liberia.
The Liberian Finance Minister described the US Government’s Millennium Challenge Model as being “particularly critical to helping countries improve governance in exchange for receiving support for expanding the private sector.”