Paris Summit mobilizes funding and vaccines for the African “New Deal” | Business and economic news

A Paris summit on Tuesday pledged to help Africa overcome the coronavirus pandemic with a “New Deal” using global financial firepower to replenish depleted coffers and accelerate the slow rollout of vaccines.

The summit, which brought together African leaders and global financial institutions, launched “a New Deal for Africa and through Africa,” French President Emmanuel Macron said at a press conference.

According to the latest AFP news agency tally from official sources, there have been a total of nearly 130,000 coronavirus deaths among African populations during the pandemic, compared to nearly 3.4 million globally, although experts believe that the official record in African countries could be underestimated.

The economic cost of the pandemic has been devastating, with the International Monetary Fund warning at the end of 2020 that Africa faces a $ 290 billion deficit until 2023, undermining all development efforts.

Meanwhile, a slow rollout of the vaccine has raised fears that variants could emerge on the continent and then spread around the world.

The summit was dominated by fears that, as richer countries launch economic stimulus packages, Africa lacks the means to do the same and risks increasing inequality and, therefore, increasing poverty. insecurity.

“We cannot afford to leave African economies behind,” the summit’s final declaration said.

Vaccine patent waiver call

Macron said there was also great inequality in terms of Africa’s limited access to coronavirus vaccines, and the summit hoped the patents would be lifted so Africa could start producing its own vaccines.

Citing the slow pace of vaccination as a major problem for the continent, Macron called for the vaccination of 40% of people in Africa by the end of 2021.

“The current situation is not sustainable, it is both unfair and ineffective,” he said.

“We ask the World Health Organization (WHO), the World Trade Organization (WTO) and the Medicines Patent Pool to lift all these constraints in terms of intellectual property which block the production of certain types of vaccines” Macron added.

Senegalese President Macky Sall hailed a “shift in mindset” in approach, as G20 countries realize their own well-being depended on progress in immunization in Africa.

“We have a common responsibility; vaccinating your own populations does not guarantee health security, ”he said.

“This is a great opportunity for Africa,” said Congolese President Félix Tshisekedi, the current head of the African Union. The pandemic “has impoverished our economies because we had to use all the means at our disposal, the few means at our disposal, to fight against the disease”.

IMF chief Kristalina Georgieva has warned that failure to speed up vaccine deployment in Africa would also have economic consequences.

“It is clear that there is no lasting exit from the economic crisis if we do not come out of the health crisis,” she said.

On the financial front, “we will take advantage of the international financial system to create the fiscal space essential to African economies,” said the closing press release.

The signatories have said they will now push for the rapid general allocation of $ 650 billion in Special Drawing Rights (SDRs) by the IMF to all its members, of which about $ 33 billion will go to Africa.

SDRs are a reserve asset used to strengthen the financial position of IMF members, based on a basket of currencies, which can be converted into much-needed dollars.

French President Emmanuel Macron speaks at a joint press conference after the summit [Ludovic Marin/Reuters]

The United States has pushed for such a disbursement from the IMF to counter the economic impact of COVID-19, including low-income countries.

Macron told the press conference that several rich countries had agreed to cede their share of SDRs to African countries because $ 33 billion “is too little”, hoping that voluntary contributions could bring Africa’s share to $ 100 billion. dollars, to which the IMF could add some of its gold reserves.

Some experts criticized the SDRs for being easy money for financially irresponsible nations, and Tuesday’s statement urged countries “to use these new resources transparently and efficiently.”

‘Global Growth Champion’

Summit leaders pledged they would seek to supplement the SDRs with “flexibility on debt and deficit ceilings”, but they also urged countries to undertake “the necessary reforms at the national level”.

Italian Prime Minister Mario Draghi, former head of the European Central Bank, promised that the summit’s proposals would be supported by the group of G20 countries and “in all multilateral institutions around the world”.

Debt restructuring would be an important part of efforts to help Africa, Draghi said.

Georgieva said there was “a very dangerous divergence between advanced economies and developing countries, especially Africa”.

French President Emmanuel Macron seizes African Development Bank President Akinwumi Adesina alongside Ivorian President Alassane Ouattara, right, ahead of Tuesday’s summit opening session [Ludovic Marin/Reuters]

African economic growth was on track at just 3.2% this year, far behind the 6% forecast in the rest of the world, she said.

The African Development Bank predicts that up to 39 million people could fall into poverty this year, with many African countries at risk of debt distress due to the pandemic.

The summit welcomed a moratorium on public debt service agreed in April by the world’s major lenders.

The summit took place a day after a conference on Monday attended by several heads of state who aimed to rally support for the Sudanese government.

Leaders at Tuesday’s summit are also expected to discuss debt relief initiatives and how to cut African private sector interest rates to boost investment and growth.

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