Remarks Mathias Cormann,

Secretary-General, OECD

Dear Ministers, dear colleagues,

Africa’s GDP contracted by 1.9% in 2020, with fourty-one countries entering into recession. The consequences are stark. 39 million people could fall in extreme poverty.

The continent faces this crisis with limited finances. COVID-19 futher contracted government revenues while public spending increased to support health and economies. Several African countries are, as a result, facing debt service challenges with a few defaults and some on the verge of it.

But Africa remains a continent of opportunities. The African Continental Free Trade Area (ACFTA) is worth USD 2.4 trillion, bringing together 54 countries and 1.3 billion people. Up until COVID-19, Africa had the world’s second highest real GDP growth at 4.2% between 2000-19, fuelled at 70% by domestic demand. FDI inflows were growing at 8.5% per year. By 2050, Africa will account for 69% of the increase in global labour force.

We must work together to support Africa realise its full potential, putting resilience, inclusion and sustainability at the heart of its response to the crisis.

First, and as a matter of priority, we need to continue addressing the immediate health challenge, including by pursuing an all-out effort to reach the entire world population with vaccines. Currently, in Africa, less than 2% of the total population received a first dose of vaccine.

Second, we must foster Africa’s efforts for domestic resources mobilisation. OECD analysis shows that the tax-to-GDP ratio of 30 African countries has been stagnating at around 16.5% since 2014, half the rate of OECD countries at 34.3%. Programs such as the OECD-sponsored West African Academy for Tax and Financial Investigation, or Tax Inspectors Without Borders support the strengthening of tax systems in Africa. Those initiatives are effective and successful, but they need further support from G20 members.

Third, we must step up our support to Africa’s productive infrastructure, regional integration and digital transformation by ensuring access to trade and facilitating investments in line with key standards, such as the G20 Quality Infrastructure Investment Principles. We also need to mobilise finance for the climate transition and the achievement of the Paris agreement objectives on the continent.

We are supporting those efforts through initiatives such as the joint African Union Commission and OECD Development Centre Platform on investment and productive transformation; the NEPAD-OECD Africa Investment Initiative; and the OECD/UNDP Framework for Aligning Private Finance with the SDGs.

Last but not least, it is absolutely essential to promote female employment and entrepreneurship. Based on the OECD Gender and Social Institutions Index (GSII), we estimate the cost of social institutions that discriminate against women at 7.5% of Africa's GDP in 2019 - a cost that has been compounded by the COVID-19 crisis.

Now is the moment for a decisive push by G20 countries to ensure the African continent can meet both the SDGs and the objectives of the Paris Agreement. Count on the OECD.