Asian countries encouraged to forge economic ties with Africa

Participants at a webinar to promote the 2021 African Economic Outlook among Asian audiences have agreed that overcoming Africa's debt challenges will benefit not only the continent, but also its partners in Asia, and the world economy as a whole.

The webinar, which was held last week and whose official report was released on Wednesday, is the second such webinar for the region, following the successful launch of the Asia 2020 African Economic Outlook webinar last year. The report, titled "2021 African Economic Outlook for Asian Audiences", underscored the importance of the Asian stakeholders to Africa given that the region is becoming an increasingly important source of Africa's external debt.

While giving the keynote speech at the event, Khaled Sherif, the vice-president for regional development, integration and business delivery at the African Development Bank, said bilateral loans from the bank's four nonregional member countries in Asia which are China, India, Japan and South Korea, represented more than 15 percent of the continent's total external debt at the end of 2019.

"Asia is now Africa's main trading partner in merchandise goods, accounting for 40 percent of total trade in 2019. Therefore, it is in the interests of both parties that Africa rapidly recover from the COVID-19 pandemic.The fates of African and Asian economies are intertwined and this webinar presents a good opportunity to come up with innovative policy options to revive and strengthen the economic ties between the two partners," Sherif said.

During a panel discussion in the webinar, Jingying Sun, the deputy chief of staff at the National Institute for Global Strategy at the Chinese Academy of Social Sciences said China has been actively engaged in international debt relief efforts, such as the G20 Debt Service Suspension Initiative and the Common Framework.

"The total debt service payments suspended by China amount to $ 1.35 billion, with 23 African countries benefiting from the initiative. Not more than 5 percent of special drawing rights of the International Monetary Fund is currently allocated to Africa and the continent could recycle that of rich countries, including Asian economies," Sun said.

According to the report, China is the biggest bilateral creditor to Africa, followed by bondholders, the World Bank and the African Development Banks. The report also revealed that Africa has a public investment efficiency gap of 39 percent, partly due to poor governance frameworks. It also recommended that African countries must eradicate all forms of leakages in public resource management to build investor confidence.