We cannot enjoy a full global economic recovery if the main engine of future economic growth – Africa – is not recovering. With this in mind, French President Emmanuel Macron convened a Summit on Financing African Economies in Paris on Tuesday.
President Cyril Ramaphosa attended the summit along with representatives from 28 other African countries, China, China, France, Germany, Italy, Portugal, Spain, Netherlands, UK, US, Saudi Arabia and the UAE. Ramaphosa made strong remarks at the summit on Africa’s vision for economic recovery, and in this way shaped the agenda.
The summit was a culmination of efforts begun by Ramaphosa when he was Chair of the African Union last year, when he appointed Special Economic Envoys to interface with the international financial institutions on the economic challenges facing the African continent and to mobilise support. As AU Chair, Ramaphosa had tried to secure a strong and inclusive economic recovery in Africa in the wake of the Covid-19 pandemic.
According to Senegalese President Macky Sall, African nations will face a spending shortfall of $285 billion (about R4 trillion) over the next two years. One of the main priorities of the summit was to urge countries to assist in closing the $19 billion financing gap for this year.
The combined economy of Sub-Saharan Africa shrank 1.9 percent last year – the worst contraction on record. African businesses have struggled to get financing and pushed employment down 8.5 percent, and left 17 countries in debt distress last year. Ways need to be found to support small and medium enterprises in Africa, including through loan guarantees.
The International Monetary Fund (IMF) estimates that additional financing of up to $285 billion would be needed during 2021-25 for African countries to step up the spending response to the pandemic, with about half of it for African low-income countries. The middle-income countries also require special attention. Absent a collective action, the financing and objectives of the 2030 Agenda for Sustainable Development and the African Union’s 2063 Agenda will be compromised.
Summit participants discussed the issue of debt relief and support for African countries from the IMF through Special Drawing Rights. African leaders pushed the IMF to redirect $100 billion in IMF Special Drawing Rights reserves to Africa by October.
The summit, ultimately, called for a swift decision on and implementation of an unprecedented general allocation of IMF’s Special Drawing Rights that is expected to amount to $650 billion, of which about $33 billion is to increase reserve assets of African countries, and urged countries to utilise these new resources transparently and effectively.
To relieve African economies suffering from external public debt vulnerabilities, the G20 and Paris Club creditors stated that they are acting upon the agreement in the April G20 FMCBG communiqué, and in the Common Framework for Debt Treatments beyond the Debt Service Suspension Initiative (DSSI) adopted in November last year.
The Summit welcomed the ambition to develop an Alliance for Entrepreneurship in Africa to help mobilise all partners, public and private, to support – through financial, technical resources, and capacity building - the development of the African private sector.
A particularly important outcome of the summit was the call for vaccine patents to be lifted in Africa to allow for the manufacturing of vaccines on the continent. President Ramaphosa stressed the need for the temporary waiver of the TRIPS regulations, and the need for that to be supported by other countries so that Africa can independently produce vaccines. Minister Naledi Pandor, who accompanied the President to the summit, said that a waiver could be the precursor to a larger African capacity to produce a range of vaccines.
France expressed its keen interest in establishing a partnership with South African vaccine producers to strengthen the capacity of South Africa to produce vaccines. President Macron articulated his goal that 40 percent of people in Africa should be vaccinated by the end of this year. “The current situation is not sustainable, it is both unfair and inefficient,” Macron said. Macron warned that failing to vaccinate Africans risked allowing potentially dangerous variants to emerge and spread.
The statement at the end of the summit read: “We also need, in partnership with the private sector, to speed up vaccine production, by developing local manufacturing capacities in Africa. This can be facilitated by voluntarily sharing intellectual property and actively transferring technologies and know-how, consistent with international legal frameworks, such as through entering into license pooling and manufacturing agreements to enable local production.”
On the sidelines of the summit, President Ramaphosa met with the Presidents of Angola, Cote D’Ivoire, Rwanda, Mozambique, and the Democratic Republic of Congo. The leaders spoke about the urgency and state of their vaccination programmes, but the key issue for most is economic recovery, and a stimulus package to support their economies to recover.
Macron plans a state visit to South Africa at the end of this month where the issues discussed at the summit will be taken further.
* Shannon Ebrahim is Independent Media’s Group Foreign Editor.