The Paris Summit Mobilizes Financial Resources and Vaccinations for Africa’s ‘New Deal.’

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Tuesday’s Paris summit pledged to assist Africa in overcoming the coronavirus pandemic through a “New Deal” that would leverage global financial resources to replenish exhausted coffers and accelerate a slow vaccine rollout.

The Paris summit, which brought together African leaders and representatives from global financial institutions, officially launched “a New Deal for Africa and by Africa,” host French President Emmanuel Macron said during a news conference.

According to the most recent AFP news agency tally based on official sources, nearly 130,000 coronavirus deaths occurred among African populations during the pandemic, compared to nearly 3.4 million worldwide. At the same time, experts claim official tolls in African countries could be underestimated.

The pandemic’s economic impact has been catastrophic, with the International Monetary Fund warning in late 2020 that Africa will face a $290 billion deficit by 2023, weakening all development efforts.

Meanwhile, the slow pace of vaccine implementation has raised concerns that variants could emerge on the continent and then spread globally.

The summit was dominated by concerns that, while wealthy nations launched economic stimulus packages, Africa lacked the resources to follow suit, risking increased inequality and, ultimately, instability.

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

Request for patent exemptions on vaccines

Macron noted that there is still a considerable disparity in African access to coronavirus vaccines. The summit hoped that patents would be lifted to enable Africa to begin producing its vaccines.

Macron cited the continent’s slow vaccination rate as a major concern, pledging to get 40% of Africans vaccinated by the end of 2021.

“The current situation is untenable; it is also inefficient,” he said.

“We are requesting that the World Health Organization (WHO), the World Trade Organization (WTO), and the Medicines Patent Pool lift all intellectual property restrictions impeding the development of such vaccines,” Macron added.

Senegal President Macky Sall lauded the approach as a “change in mentality,” with G20 nations realizing their well-being was contingent on vaccine success in Africa.

“We share responsibility; vaccination of one’s communities does not ensure health security,” he said.

“This is a tremendous opportunity for Africa,” Congolese President Felix Tshisekedi, the African Union’s new president, said. The pandemic “depleted our economies” as a result of “having to use all available means, the few available means, to combat the epidemic.”

Kristalina Georgieva, head of the International Monetary Fund, cautioned that failure to accelerate vaccine deployment in Africa would have economic ramifications.

“It is self-evident that there will be no lasting recovery from the economic crisis unless and until we address the health crisis,” she said.

 

On the financial front, the closing statement said that “we will harness the international financial system to build critical fiscal space for African economies.”

The signatories stated that they will now advocate for the IMF to expeditiously distribute $650 billion in special drawing rights (SDRs) to all of its members, with approximately $33 billion going to Africa.

SDRs are a reserve currency used to bolster IMF members’ financial positions. They are focused on a basket of currencies that can be exchanged into much-needed dollars.

France’s President Emmanuel Macron speaks during a joint news conference at the end of the summit [Ludovic Marin/Reuters]
The US has been advocating for such an IMF payout to offset the economic burden of COVID-19 on low-income countries in particular.

Macron told a news conference that many wealthy countries had decided to transfer their share of SDRs to African countries because $33 billion was “inadequate,” with the hope that voluntary donations would increase the African share of $100 billion, to which the IMF might contribute some of its gold reserves.

Some analysts have criticized SDRs as easy money for fiscally reckless countries, and Tuesday’s declaration urged countries to “make open and efficient use of these new tools.”

‘World Growth Champion’

The summit leaders pledged to supplement SDRs with “flexibility on debt and deficit ceilings” and urged countries to implement “required domestic reforms.”

Italian Prime Minister Mario Draghi, a former president of the European Central Bank, pledged that the summit’s recommendations would be backed by the G20 community of countries and “all multilateral institutions worldwide.”

Draghi said that debt restructuring would play a significant role in assisting Africa.

Georgieva stated a “very dangerous divergence” between developed economies and developing economies, especially in Africa.

French President Emmanuel Macron grabs the president of the African Development Bank Akinwumi Adesina next to Ivory Coast President Alassane Ouattara, right, before the opening session of Tuesday’s summit [Ludovic Marin/Reuters]
African economic growth is expected to be just 3.2 percent this year, well below the estimated 6 percent for the rest of the world, she said.

According to the African Development Bank, up to 39 million people could become impoverished this year, putting many African countries in debt distress due to the pandemic.

The Paris summit commended key global lenders for agreeing in April to a moratorium on public debt servicing.

The Paris summit took place a day after many heads of state attended a conference aimed at rallying support for Sudan’s government on Monday.

The leaders meeting on Tuesday is also expected to address debt reduction measures and ways to lower interest rates for Africa’s private sector to stimulate investment and development.

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