US – Africa Summit: President Biya Says Africa’s Top Economic Problem Is Lack Of Financing

By Tata Mbunwe

President Paul Biya, in his first public presentation at the US – Africa summit in Washington DC, has pointed out poor financing and under exploitation of Africa’s natural resources as the continent’s greatest economic problem.

While sharing his vision on how financing can boost Africa’s economic growth, Biya said foreign partners need to finance projects in African countries aimed at exploiting and transforming the continent’s natural resource, which, he said, “remain highly under exploited.”

He made the statement while addressing dignitaries and other African Heads of State as the keynote speaker of a round table conference organised by the Milken Institute and Invest Africa US on Monday, December 12.

The round table conference held under the theme: “How financing can be a force for good in addressing Africa’s most pressing challenges and opportunities and contributing towards solving seemingly unresolvable global problems.”

President Biya noted that Africa is very dependent on foreign aid, which is not serving the continent’s needs any longer.

This is because the laws guiding the acquisition of loans expose Africa to much economic insecurity and instability.

He regretted that Africa gets the least portion of global financing and even when such financing is done, it is given at a high interest rate with many strings attached to it — that may influence the sovereignty of the state.

Biya’s sustainable financial vision for Africa is that of empowering countries to be able to exploit and transform their own resources.

He proposed that an African capital market should be put in place to generate financing that is tailored towards African needs, such as helping Africa transform its own raw materials.

President Biya regretted that Africa’s resources are highly under exploited and those that are exploited are not transformed on the continent, but shipped to foreign countries.

This means Africa does not enjoy the added value and wealth generated by its resources.

Like most African countries, Paul Biya’s country, Cameroon, highly depends on external donors (China, IMF, World Bank, AfDB, FDB, IsDB, etc.) to finance its public projects.

IMF data published in March 2022 reveals that Cameroon’s public gross financing needs from 2021–2024 is estimated at CFAF 6,901 billion (25.4 percent of GDP), of which average 65 percent is assumed to be financed externally.

Biya’s economic road map for Africa is being stated at a time when his country is trapped in an economic choas, with rising levels of inflations, unemployment, and an estimated public debt of around FCFA 11,366 billion (45.6 percent of GDP) as of the end October 2021, stated the IMF.

The country has been trying to expand revenue sources, the latest which has been to increase taxes.

Role of MPs

Cameroon’s Parliament recently adopted FCFA 6,345.1 billion (about 10 billion US dollars) as budget for 2023 and, amid uncertainty about where how this money will be generated, it went on to raise prices of fiscal stamps and windscreen licenses by 50 percent, and increased export prices of cocoa bean by 10 percent.

This comes amid general outcry about increasing economic hardship in the country, marked by inflation and unemployment.

The country’s Finance Minister, Louis Paul Motaze, however, remains hopeful about the future of Cameroon.

He projected Cameroon’s economic growth rate at 4.2 percent in 2023 compared to a forecasted growth of 3.7 percent in 2022, while he defended next year’s budget in Parliament on December 5.