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International donors aim to mobilize billions for Africa’s economy

Nigerian Economy

International donors gathering at a summit in Paris On Tuesday pledged to mobilize more than 100 billion dollars to help boost Africa’s economy amid the crisis unleashed by the pandemic.

Together with the International Monetary Fund (IMF), the countries can mobilize some 100 billion dollars, French President Emmanuel Macron said on the sidelines of the summit he convened.
“Growth and stability in Africa means growth and stability in Europe,” said IMF chief Kristalina Georgieva.

The proportion of people in Africa who have received the vaccine is among the lowest worldwide, said Macron, who estimated that the continent would need funding of 285 billion dollars through to 2025.

Additionally, he argued that producers should forgo the patents to coronavirus vaccines, so that production of supplies for Africa can be ramped up. Senegalese President Macky Sall noted that this was a joint responsibility for the whole world: If vaccines aren’t delivered everywhere, more variants will arise, once again threatening the world.

The problem in Africa, Macron said, is not just a health one, but also one of economic and social emergencies. Countries on the continent need at least 285 billion dollars by 2025, he argued. Macron had already promised on Monday to erase 5 billion dollars worth of bilateral aid to Sudan.

The trick in the coming weeks will be to convince other rich countries, like the United States, to devote the necessary resources to Africa, he said.

Macron had invited heads of state and government and the leaders of international organizations to attend the meeting at the Grand Palais Ephemere, a temporary exhibition hall near the Eiffel Tower. Some joined by video link.

Participants included European Commission president Ursula von der Leyen and EU Council President Charles Michel.

“We have to go back to the strong development Africa had before Covid,” Georgieva said. For the IMF, that also means extraordinary action, she said.

She said the IMF’s special drawing rights would be transferred from wealthy countries to Africa, in order to reach the sum of 100 billion dollars.

Special drawing rights are a type of reserve currency created by the IMF. In March, Georgieva proposed increasing the organization’s financial reserves by 650 billion dollars.

“We are committed to allowing the richest countries to redistribute their special drawing rights to the poorest countries, especially in Africa, so that the 33 billion of today becomes 100 billion,” Macron said.

Special drawing rights are less important to wealthy countries, with sufficient foreign reserves and access to capital markets. However, for poorer countries, these can free up funds for other purposes, such as fighting the pandemic.

Africa has been hit very hard by the pandemic, particularly the economy, said the president of the Democratic Republic of Congo, Felix Tshisekedi.

The task now is to revive the economy, which means investing in infrastructure, for example, he said.

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