Speaking at the Africa Roundtable #8, Hanan Morsy, Deputy Executive Secretary and Chief Economist at the United Nations Economic Commission for Africa, delivered a compelling call to action, urging a “narrative shift” to address the systemic challenges hindering Africa’s development. Her speech outlined critical issues, innovative solutions, and a roadmap for reform, leveraging Africa’s newfound leadership on the global stage.
Perception Gaps and Financial Premiums
Morsy highlighted that Africa faces higher financial premiums than justified by its economic fundamentals, a discrepancy driven largely by “perception gaps”. She argued that these misperceptions inflate the cost of capital for African countries, stifling investment and growth. To counter this, Morsy emphasized the need for better communication of the reforms African countries are undertaking. By showcasing tangible progress and policy advancements, Africa can reshape global perceptions and attract more equitable financing.
Reforming Global Regulations
Morsy stressed that addressing Africa’s financial needs goes beyond simply injecting more money into the continent. She pointed to the lack of credible data and restrictive global regulations as significant barriers to development. These factors create inefficiencies and misaligned incentives that disproportionately penalize African economies. Morsy advocated for reforming regulatory frameworks to reduce these inefficiencies, ensuring that global systems better support Africa’s growth rather than hinder it.
Scaling Investments with Project Aggregators
For investors seeking scale, Morsy proposed a practical solution: the use of “project aggregators” in Africa. These entities would package bankable deals, shifting the investment focus from country risk to project viability. By creating larger pipelines of projects, this approach could attract bigger investments, offering a scalable model to unlock private capital and drive infrastructure development across the continent.
Local Mineral Processing: A Game-Changer
One of Morsy’s standout proposals was the push for local mineral processing, exemplified by the production of electric vehicle (EV) batteries in the Democratic Republic of the Congo (DRC). She argued that processing minerals closer to their source is cheaper and more environmentally friendly, reducing emissions and costs by 30%. This strategy not only strengthens African economies by adding value locally but also lowers global emissions and secures Europe’s supply chains. Morsy presented this as a win-win solution, aligning economic development with global sustainability goals.
Role of Multilateral Development Banks (MDBs)
Morsy underscored the critical role of Multilateral Development Banks (MDBs) in addressing Africa’s current challenges. With Official Development Assistance (ODA) declining, severely impacting sectors like health, she warned that the ongoing crisis could escalate without intervention. Strengthening MDBs, she argued, is essential to provide the financial stability and support needed to prevent further deterioration, making it a pressing priority for global leaders.
Seizing the G20 Opportunity
The African Union’s historic G20 seat, secured last year, and Africa’s first-ever G20 Presidency present a pivotal opportunity, according to Morsy. She called for urgent and concrete commitments to ensure this leadership moment translates into real action and impact. With the continent now at the table, Morsy urged stakeholders to capitalize on this platform to push for transformative reforms and elevate Africa’s voice in global decision-making.
Four Critical Reforms
Morsy concluded her speech by outlining four critical reforms to address systemic challenges facing Africa. Notably, she emphasized that these reforms require political will rather than additional financing, making them actionable with the right commitment:
- Operationalize Special Drawing Rights (SDRs) using African innovation
Leverage SDRs—a form of international reserve asset—to boost liquidity and support development, tailored to African-led solutions.
- Build bigger, bolder MDBs for today’s global challenges
Expand and empower MDBs to meet the scale and complexity of contemporary economic and social issues.
- Make the Sovereign Debt Restructuring Playbook binding
Establish a mandatory framework to streamline debt restructuring, providing African countries with fairer pathways to financial recovery.
- Fix global financial regulations, including Basel III’s disproportionate risk weights
Reform international rules like Basel III, which impose excessively high risk weights on African assets, to create a more equitable financial environment.
Clear path forward
Hanan Morsy’s speech at The Africa Roundtable #8 is a clarion call for change. By addressing perception gaps, reforming global regulations, scaling investments, and leveraging local resources, Africa can unlock its vast potential. With the continent now holding the G20 Presidency, the time is ripe for decisive action. Morsy’s four proposed reforms offer a clear path forward—one that demands political will from African leaders and their global partners alike. As she concluded, the time to act is now.
