The Paris Summit on ‘Financing of African Economies’ had the objective to bring Africa out of the pandemic and to invent their growth model
The President of France – Emmanuel Macron on Tuesday, i.e., May 18, 2021 announced “A New Deal for Africa and by Africa” to help Africa overcome the economic crisis caused by the Coronavirus (COVID-19).
The announcement was made during the Paris Summit on ‘Financing of African Economies’ which was attended by African Leaders and global financial institutions.
During the Summit, the host France laid the foundations of a new growth model which will see a shift from aid to investment and from public debt to private sector finance.
Taking it to twitter, Macron tweeted,
Our aim: do more for Africa.
— Emmanuel Macron (@EmmanuelMacron) May 18, 2021
He further tweeted,
Africa is our neighbour, the continent with which Europe has the most links, the most travel and the most ties. A scenario where Europe recovers while Africa plunges into distress, with a health crisis and a recession, is inconceivable.
— Emmanuel Macron (@EmmanuelMacron) May 18, 2021
Talking about raising funds, Macron tweeted,
Above and beyond lightening the debt burden, the international community is opening the way to budget assistance. Our aim is to do more for Africa and, with the rest of the international community, raise at least $100 billion.
— Emmanuel Macron (@EmmanuelMacron) May 18, 2021
Macron also said Africa’s key asset are its young people but the support to the sector has never been a priority. France intends to correct that paradox now, with the launch of an alliance for African entrepreneurship.
The objective of the Summit was not only to bring Africa out of the pandemic but also to invent their growth model. There have been more than 130,000 casualties in Africa of COVID-19. The experts believe the official tolls in African countries could be undercounts.
The African Development Bank has forecasted that up to 39 million people could fall into poverty this year, with many African countries at risk of debt distress because of the pandemic.
The economic cost of the pandemic has been devastating, with the International Monetary Fund warning in late 2020 that Africa faces a shortfall of U.S. $ 290 billion up to 2023, undermining all efforts at development. While the European Union (E.U.) has launched € 750 billion COVID-19 Recovery and Resilience Fund to support its 27 Member States, Africa has struggled to do so.
The slow rollout of COVID-19 in Africa is another major challenge. Macron said he seeks vaccination of 40% of Africans by the end of 2021. He said that there is great inequality in terms of limited access that Africa has to COVID-19 vaccines. He hoped that the Summit would help lift patents so Africa could begin to produce its own jabs.
Terming the current situation and unsustainable and unfair, he urged the World Health Organization (WHO), the World Trade Organization (WTO) and the Medicines Patent Pool to remove all these constraints in terms of Intellectual Property which blocks the production of certain types of vaccines.
Speaking on the occasion, the President of Democratic Republic of the Congo and Head of African Union – Felix Tshisekedi said, “The pandemic left our economies impoverished because we had to use all the means we had, the few means we had, to fight against the disease.”
The Managing Director of International Monetary Fund (IMF) – Kristalina Georgieva warned that failure to accelerate the vaccine rollout in Africa would also have economic consequences. She said that IMF would leverage on the international financial system to create the much-needed fiscal space for African economies
She said, “It is clear that there is no durable exit from the economic crisis unless we exit the health crisis.”
The signatories agreed to push for the rapid general allocation of U.S. $ 650 billion worth of Special Ding Rights (SDRs) by the IMF to all its members, of which approximately U.S. $ 33 billion would go to Africa. SDRs are a reserve asset used to bolster the financial position of IMF members, based on a basket of currencies, which can be converted for much-needed dollars.
After the Summit, Macron told the media that several rich countries have agreed to turn their share of the SDRs over to African countries so that African share can raise from U.S. $ 33 billion to U.S. $ 100 billion, to which the IMF could add some of its gold reserves.
