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FRANCE – What results for the summit of African economies?

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The summit on the financing of African economies, held in Paris on the initiative of President Emmanuel Macron, ended on Tuesday evening, 18 May, with the main announcement of support from the international community in the health field, but without a firm financial commitment on the economic front. Recall that the objective of this summit was to launch a “New Deal” as the French president put it, in order to revive the African economies asphyxiated by the economic consequences of the Covid-19 pandemic. The ambition was to raise $100 billion to partially meet Africa’s financing need.

Moving towards 100 billion SDR to Africa

Although the continent is relatively unharmed from a health perspective, with 130,000 Covid-19 deaths, according to official figures, out of a global total of nearly 3.4 million, it is paying a very heavy economic and social toll, For lack of being able like the richest countries to launch pharaonic recovery plans. According to the IMF, a continent that needs massive investments to eradicate poverty, develop infrastructure, address climate change and the jihadist threat is short nearly $300 billion.

At the end of the summit, participants did not announce a firm commitment on this financial front, but promised to engage in discussions around the International Monetary Fund’s “Special Drawing Rights” (SDRs). Equivalent to an IMF banknote board, these monetary assets can be converted into foreign currency and spent without creating debt.

The international community has already agreed on the principle of a global SDR issue of 650 billion dollars, of which 33 billion must mechanically return to Africa, through the use of quotas within the Washington institution. “This is too little,” said the French president, who calls on rich countries to allocate a large part of their SDR to African countries, as France pledges to do, to reach a total of $100 billion.

Commenting on “a lot of technical work to be done,” Emmanuel Macron said he hoped for a “political agreement” on the SDRs either at the next G7 summit, or at the G20 summit, or between June and October.

Convince Washington and continue discussions on African debt

The main thing is to convince the United States. U.S. Treasury Secretary Janet Yellen supported a redistribution of SDRs in a press release, provided the use of funds is “transparent and accountable”.

France would also like to open the discussion on mobilizing the IMF’s gold reserves.

Another topic of discussion is the debt of African countries, which has exploded since the pandemic. If a moratorium has made it possible to give some air to the most indebted countries, the next step would be to cancel part of the debts, in a coordinated approach, under the aegis of the G20.

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African leaders stressed the need to also support the African private sector, and to move away from a logic of international public assistance conditioned by harsh reforms. In particular, Macky Sall denounced the “agreed” framework of fiscal constraints imposed on African countries, which limit their investment capacity. And called to move from a logic of assistance to a dynamic of “co-construction” between the continent and the rest of the international community.
One step closer to lifting vaccine patents?

Could this co-construction become a reality in terms of health? Emmanuel Macron stressed that the participants had decided on a “very strong initiative to massively produce vaccines in Africa”, with in particular “World Bank financing”. “We support technology transfer and work that has been requested of the World Health Organization, the World Trade Organization and the Medicines Patent Pool [supported by the UN, Editor’s note] to remove all intellectual property constraints that block the production of any type of vaccine,” the French president told the press at the end of the conference. This announcement confirms international support for the lifting of patents on vaccines, which India and South Africa have called for, following the appeal by US President Joe Biden, to which Europe has followed suit, despite opposition from pharmaceutical companies.

Given the time required to launch these productions, Emmanuel Macron explained that in the short term the summit participants had agreed to “push the ambition of Covax (organisation for the distribution of vaccines to poor countries) from 20% to 40% of people vaccinated in Africa”. For the time being, with the exception of Morocco, where 13% of the population received a first injection, vaccination rates remain low on the African continent, due to insufficient supplies.

Senegalese President Macky Sall pointed out that the widespread vaccination campaigns in industrialized countries do not guarantee «absolutely no health security». He warned against the development risk in Africa of “extremely resistant variants”.

The President of the Democratic Republic of the Congo (DRC), Félix Tshisekedi, who holds the rotating presidency of the African Union, stressed to him that the issue was also to convince the people, by countering the “work to undermine social networks that have demonized vaccination.” At the end of April, his country had to give the Covax initiative 1.3 million doses of AstraZeneca vaccines because it could not administer them before their expiry date. The motive? People’s distrust of vaccines. “We received 1.6 million doses, only 10,000 people were vaccinated, and most expatriates,” he said.

Source : Le Point

       

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