By Shweta Desai
PARIS (AA) - France on Tuesday hosted the African Economies Funding Summit promising a new economic deal for Africa with debt restructuring and allocation of special drawing rights.
“The summit is of urgency because there is a health emergency due to the pandemic and a social and economic urgency as there is a sharp slow down in growth throughout Africa. We propose a new situation, the summit is a paradigm shift,” President Emmanuel Macron said in a video statement in Paris alongside the president of the Democratic Republic of Congo and the African Union, Felix Tshisekedi and IMF managing director Kristalina Georgieva. He added that it is imperative for rich nations “to update our financial rules by taking into account this burden of security that weighs on many African states.”
The summit agreed upon three main decisions: debt moratorium by G20 countries from June to December 2021, common framework for debt restructuring of Chad, Ethiopia, and Zambia (to be developed jointly by the US, EU and China) and allocation of special drawing rights of $33 billion to African members and $22 billion for sub-Saharan countries.
Macron said France is willing to re-allocate its SDRs and will work to pursue rich countries of G7 and G20 by October to reach the target from $33 billion to $100 billion for Africa. It is estimated that African countries will require financing of 285 billion dollars between 2020 and 2025.
On the health front, Macron said through the WHO’s COVAX initiative, the aim is to vaccinate at least 40 percent of the African population. This can be made possible with collective efforts; by re-allocating extra doses and producing the vaccine in Africa. He said France had made strong proposals to adjust the rules of intellectual property and to allow real technology transfer that will empower the continent to produce more vaccines.
Tshisekedi said the summit was important for relaunching Africa, which is hit hard by the pandemic and has drained out the economies. He added that African countries would like to see the extension of the debt moratorium from December 2021 till the end of 2022. Georgieva said the IMF was supporting the summit as Africa is expected to grow only “3.2 percent as against the rest of the world at 6 percent.”
“We have to boost public and private investment in Africa by mobilizing financing from international organizations and by bringing SDRs from strong countries to Africa,” she said.
The summit brought some 30 African heads of state and government, as well as the heads of international organizations like the World Bank, the Organisation for Economic Cooperation and Development (OECD), the European Bank for Reconstruction and Development (EBRD).