The global economy could lose one of its future growth engines as the pandemic ends a quarter of a century of steady economic growth on the continent
Although Africa has suffered fewer cases and deaths from Covid-19 than other regions of the world, the impact of the pandemic on the continent could be more sustained, entrenched and destabilizing for the entire planet. Within a year, the pandemic halted a quarter of a century of steady economic growth, disrupted value chains and caused unprecedented increases in inequality and poverty.
But it is not only Africa that risks losing its chance to fully emerge from Covid-19. The global economy could lose one of its future engines of growth.
Africa has everything it takes to overcome the pandemic crisis and lead the world towards a new cycle of sustainable growth: enterprising and innovative young people, natural resources that can fuel a local industrial base and a very strong continental integration project. ambitious. But Africa does not have the tools to recover from a crisis as enormous as it is unexpected.
While the International Monetary Fund estimates that African countries will need $ 285 billion in additional financing by 2025, there is no stimulus plan or mechanism in place to secure these resources. While other regions are now seeing signs of rapid economic recovery, Africa’s inability to fight the pandemic with the same levers could fuel an economic and social crisis that denies its young people the opportunities they need and need. they deserve.
International solidarity began to bear fruit soon after the start of the pandemic. Debt service payments to the poorest countries have been suspended under the G20 and exceptional financial assistance from the IMF, the World Bank and other donors, including Europe, has been made available. disposition.
But the institutions that have supported international solidarity for decades are now reaching their limits. They have been weakened in the short term by enormous inequalities in access to vaccines. They are also weakened by major economic differences, which no emergency measure seems capable of stopping.
This is why a new framework, an ambitious and daring New Deal, is necessary. And the first test of this initiative must be access to Covid-19 vaccines. Thanks to COVAX, the vaccine pillar of the accelerator of access to Covid-19 tools (ACT) of the international community, and to the African vaccine acquisition team, hundreds of millions of doses will be delivered in Africa in the coming months. Pre-ordered vaccine doses are shared through multilateral channels, with the protection of healthcare workers being the top priority.
But that’s not enough. Immunization is the most important economic policy in the world right now: its benefits are measured in the trillions, the cost in the billions. It is the most profitable investment in the short term. We must therefore mobilize innovative financial instruments to increase funding for the ACT accelerator, in order to achieve the goal of immunization coverage in Africa, set at 60-70% by the African Centers for Disease Control and Prevention. We call on the IMF to recognize the use of Special Drawing Rights (SDRs, the Fund’s unit of account) to finance this effort.
In addition, as the Rome Declaration of the World Health Summit on May 21 says the key to tackling future pandemics is the transfer not only of licenses but also of expertise to vaccine producers in developing countries. Pending the conclusion of an intellectual property agreement currently under negotiation at the World Trade Organization, Africa must be able to produce vaccines using messenger RNA (mRNA) technology and break an agreement, within of the WTO, on trade-related aspects of intellectual property. Rights regime (TRIPS). Under the impetus of the Paris summit of African, European and financial leaders, which was held on May 18, such production partnerships will be financed and will materialize in the coming months.
The second component of a New Deal for Africa is a large-scale investment in health, education and the fight against climate change. We must allow Africa to limit this spending to investment spending in security and infrastructure, preventing the continent from slipping into a new cycle of excessive debt. In the short term, despite the spectacular success of some African countries in exploiting international capital markets, private creditors will not provide the necessary financial resources.
Africa needs a positive confidence shock. The Paris summit allowed us to consolidate an agreement on a new SDR allocation of 650 billion dollars, of which 33 billion dollars will go to African countries. Now we want to go even further with two voluntary commitments.
First, we need a commitment from other countries to mobilize part of their SDR allocations for Africa. As a first step, this reorientation of resources would allow an initial threshold of US $ 100 billion to be released for Africa (and vulnerable countries elsewhere).
Second, African institutions must be involved in using these SDRs to support the continent’s recovery and progress towards achieving the 2030 Sustainable Development Goals. This, in turn, can pave the way for an overhaul of our international financial architecture that gives more weight to African institutions.
We call on all members of the international community to make this double commitment.
Finally, we must focus on Africa’s main asset: its entrepreneurial dynamism. The continent’s very small, small and medium-sized enterprises are the lifeline for the future of African women and youth, but the private sector is hostage to informality and underfunding. This is why we must focus on improving the access of African entrepreneurs to finance by targeting the most crucial phases of their projects, in particular the start-up.
The objective of the Paris summit was to reach agreement on four objectives: universal access to Covid-19 vaccines, including through production in Africa; strengthen the positions and roles of pan-African institutions within a new international financial architecture; revive public and private investments; and support large-scale financing of the African private sector. Our task in the coming months will be to advance these objectives in international fora and within the framework of France’s next six-month term as President of the Council of the European Union.
(This commentary is also signed by António Costa, Prime Minister of Portugal; Pedro Sánchez Pérez-Castejón, Prime Minister of Spain; Alexander De Croo, Prime Minister of Belgium; Charles Michel, President of the European Council; Ursula von der Leyen, President of the European Commission; Mohammed bin Salman, Crown Prince of Saudi Arabia; Mohammed bin Zayed, Crown Prince of the Emirate of Abu Dhabi; Félix Antoine Tshisekedi Tshilombo, President of the Democratic Republic of the Congo and President of the African Union ; Faure Gnassingbé, President of Togo; Alassane Ouattara, President of Côte d’Ivoire; Abdel Fattah el-Sisi, President of Egypt; Filipe Nyusi, President of Mozambique; Muhammadu Buhari, President of Nigeria; Roch Marc Christian Kaboré, President of Burkina Faso; Azali Assoumani, President of Comoros; Nana Akufo-Addo, President of Ghana; João Lourenço, President of Angola; Sahle-Work Zewde, President of Ethiopia; Mohamed Ould el Ghazouan i, President of Mauritania; Kaïs Saïed, President of Tunisia; Bah N’Daw, former president of Mali; Mohamed Bazoum, President of Niger; Albert Pahimi Padacke, Prime Minister of Chad; Abdalla Hamdok, Prime Minister of Sudan; Denis Sassou Nguesso, President of the Republic of Congo; Patrice Talon, President of Benin; Paul Biya, President of Cameroon; and Moussa Faki, President of the African Union Commission.)
Emmanuel Macron is President of France. Paul Kagame is President of Rwanda. Cyril Ramaphosa is President of South Africa. Macky Sall is President of Senegal.
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