Mahama To Global Financiers: Africa’s Answer To Declining Aid Is Industrialisation, Not Begging

President John Dramani Mahama has urged global financiers and policymakers to support a fundamental shift in Africa’s economic relationship with the rest of the world, arguing that the continent’s response to declining foreign aid should be industrialisation, affordable capital and greater economic ownership.

Addressing institutional investors, multilateral lenders and international policymakers at the Financial Times Africa Summit in London, President Mahama criticised aspects of the global financial architecture, particularly what he described as the excessive risk premium imposed on African economies.

He said African countries often borrow at significantly higher interest rates than their Western counterparts, limiting their ability to finance development and respond effectively to global challenges such as climate change.

“The global order is rigged against Africa. I have always maintained that position,” President Mahama told delegates.

“We borrow at eight times the interest rates at which Western nations borrow. Sometimes, we borrow to ameliorate the effects of climate change, which we did not create.”

The President, who is set to assume the chairmanship of the African Union (AU) in January 2027, said Africa must move beyond dependence on traditional development assistance and focus on building resilient and sustainable economies.

He dismissed the idea that African countries could respond to declining Official Development Assistance (ODA) by simply seeking more donor support.

“The response to dwindling aid is not to learn how to improve your begging skills,” he said.

“You need to respond differently by becoming more resilient and more sustainable.”

Using Ghana as an example, President Mahama said the withdrawal of funding from the United States Agency for International Development (USAID) had created a financing gap of about US$154 million annually, including approximately US$74 million previously allocated to critical health interventions such as HIV testing and antiretroviral treatment.

He said the development had reinforced the need for African countries to strengthen domestic resource mobilisation and build greater capacity to finance their own development priorities.

According to him, Ghana’s “Accra Reset”, initially conceived as a mechanism to safeguard social spending, has evolved into a broader framework aimed at strengthening economic governance, resilience and self-reliance.

“You cannot own the outcome when you are not part of the decision-making,” he said. “We must have some control.”

President Mahama also called for a major transformation of Africa’s production and trade structure, urging the continent to move away from exporting raw commodities and importing finished goods.

He identified local processing, manufacturing and value addition as critical to creating jobs for Africa’s growing youth population while making the continent more attractive to long-term private investment.

“We cannot continue forever as exporters of raw materials to the rest of the world and consumers of finished products,” he said.

“We must bring part of that processing and value addition into Africa to create jobs for our young people.”

He stressed that Africa’s push for greater economic sovereignty should not be interpreted as a move towards isolationism.

Rather, he said the continent was seeking stronger commercial partnerships based on equity, co-ownership, local processing and greater participation in decision-making.

President Mahama said such a shift would create new opportunities for foreign direct investment, joint ventures and long-term private capital while enabling African economies to retain a greater share of the value generated from their natural resources.

Source : Kobina Darlington

Radio1 Online