51吃瓜

Moderator: So we wanted to ask you what role, for your office do you see in, in bringing African countries together, in the creation of regional strategies for safe and inclusive DPI. Please; the floor is yours  

Cristina Duarte: Thank you very much for the invitation it’s a pleasure to be here. Thank you, my dear colleague Amandeep. 

The role of OSAA [the UN Office of the Special Adviser on Africa]:

In the last four years, me and my team, we undertook an exciting analytical process, trying to understand, in short, why Africa is stuck; why Africa has only delivered 12 per cent of the 140 targets of the SDG. Why Africa has been losing $500 billion a year. Why Africa has 100 million children outside school.

And that process was an amazing process because we start in 2020 by first realizing that the root cause of conflict and instability in Africa was the absence of the state, weak country systems, weak institutions. And this is the reason we do not control our flows. And in this four-year journey, starting with the absence of the state, we end up with DPI as a key success factor.

You all in this room will ask me what is the relationship between the absence of the state, the inability of the state to deliver social services, public goods, and DPI. When building this narrative and trying of course to have a deep conversation, let's say, with our African policymakers, which are our main stakeholders, we need to identify an entry point in terms of DPI.

And of course, for us, it was obvious that debt, the debt situation, the debt distress that Africa is under right now would be a smart, tactical entry point. And what we know, let’s go very quickly to the debt narrative, so you understand how come DPI lands in this narrative. As of today, there is a global narrative basically saying that Africa’s debt… everybody knows, the numbers are there. And this same global narrative says that the main reason for Africa’s debt distress is overindebtedness, this is the global narrative. And of course, when you accept that overindebtedness is the main explanation for debt distress, it puts your mindset automatically, looking only for short-term solutions, only for short-term solutions.

And in fact, this is the case when you start discussing overindebtedness solutions. What we saw: A production of credit facilities from World Bank, AfDB, IMF emergency facility, urgency facility, disaster facility. And of course, these are not the solutions. And this is the reason that in the past 30 years, Africa has undertaken 320 debt restructuring. And we are still looking, getting prepared to do so. Where we need, this is the flow. Wrong. Africa is not overindebted. Africa is in debt distress. Everybody believes. But Africa is not the… is not a continent overindebted. The reason why Africa's in debt distress—actually, our debt is very low, by the way, don’t buy this narrative, please. The reason that Africa is in debt distress, and I'll be very open—Amandeep knows that I’m very open—is because we do not control our economic and financial flows. This is the reason.

As I said, Africa loses, and I had the opportunity to mention in a previous webinar, let’s say, Africa is in debt distress because we do not control our economic and financial flows. And the tip of the iceberg is the fact that we lose $500 billion on a, let’s say, on an annual basis. If you accept that the main reason for the debt distress is a lack of control of economic and financial flows, it puts your mindset on long-term solutions. Because you do not control economic and financial flows in one day. You need a process. So when you have your mindset in the long-term space for solutions, you will realize that you need to control your flows and stop losing money. You need to build strong domestic resource mobilization systems—DRM systems. We need to put DRM systems as the driver of financing for development in Africa, not ODA, please, not ODA. Today, Africa finances itself in more or less 75 per cent. Twenty times more than ODA and almost 20 times more than FDI.

So when you realize that to tackle the lack of control of economic and financial flows, to tackle debt distress, and putting yourself in a long-term mindset environment, you end up concluding: okay, let’s get together and build the domestic resource mobilization systems in general. And the only way to do that is by acknowledging that digital public infrastructure is a key success factor. Without DPI, we will not be able to do it. And Cabo Verde, Rwanda are, I believe, strong examples. Once you use DPI, I am about to finish, and I’m answering all two questions. All the two questions. Yes yes yes yes yes.

So when you realize that you need to build DRM systems and DPI is the key success factor, let’s say in this way, and we start seeing that digital public infrastructure, if done in a certain way, is a source of ownership for the country. It is a source of ownership. We need to bring political economy and political science to these conversations. It’s more than, I believe, only technological issues. When you start building your DRM systems with DPI as a key success factor feeding your ownership, you as a policymaker, you start enjoying policy space. When you enjoy policy space, you start controlling your deficit or you finance your deficit. When you start controlling how you finance your deficit, you start reshaping the risk profile of your country. And you are put in a much better position in terms of debt management.

As of today, there are some African countries that debt services 25 per cent of budget revenues, and education is 8 per cent, which has the need to reverse 25 per cent to education and 1 per cent to debt service. And to do that, yes, DPI is not the solution, but it is that critical piece in the equation. If you do not activate: no takeoff. As simple as that. No takeoff. And of course, all these narratives that my office has been developing is hoping that we’ll be able to, everybody, to move from managing poverty to managing development.

We are so rich. Why manage poverty in a rich continent?

Back to you.