Financing of African Economies Summit: A new deal for Africa?

On 18 May, more than 20 African leaders, together with the heads of the IMF and AfDB attended the Summit on the Financing of African Economies, hosted by French President Emmanuel Macron in Paris. The summit aimed to help Africa overcome the coronavirus pandemic with the creation of a “new deal”, which will see greater support from global financial powers to replenish depleted coffers. International partners also pledged to help  accelerate the continent’s sluggish vaccine rollout.

Boosting reallocations

The economic impact of the pandemic throughout Africa has been profound. The IMF has warned the continent could face a development financing gap of up to USD 285 billion by 2023 as a result of slowed economic growth. The AfDB expects that this could push up to 39 million people into poverty in 2021, with many countries at heightened risk of debt distress. 

International efforts to support Africa’s recovery – including the G20 debt moratorium in April 2020 and the allocation of USD 33 billion in IMF special drawing rights (SDRs) – have failed to close the financing gap. At this week’s summit, Macron sought to persuade wealthier IMF member states to reallocate USD 100 billion to Africa by October 2021.

While a step in the right direction, this still falls well short of the continent’s USD 285 billion financing gap. Securing the buy-in of the US – the largest recipient of the planned SDR allocation – will be crucial. It will require a concerted push by President Joe Biden and Congress. Without this support, Macron’s proposal will likely struggle to gain sufficient traction.

Accelerating the vaccine rollout

Currently, less than 3% of Africans have received a COVID-19 vaccination, while COVAX doses remain wholly insufficient to meet the continent’s demand. This sluggish vaccine rollout could lead to a surge in new variants, which would stall the continent’s economic growth and undermine global growth prospects. President Macron has therefore set an ambitious target of having 40% of Africans vaccinated by the end of 2021 through the COVAX scheme – a doubling of the initiative’s initial vaccination targets. 

To achieve this, Macron and African leaders hope to boost vaccine production in Africa by convincing international regulators to remove intellectual property constraints on vaccines. AU chair and DRC President Felix Tshisekedi noted that this will not only reduce vulnerability to supply disruption, but will help overcome vaccine hesitancy.

A paradigm shift?

Although it will take time to implement these various pledges, the summit might have set the stage for a new, more cohesive and equitable relationship between Africa and its global partners on finance and health issues. As Senegalese President Macky Sall noted, Africa is now shifting from having programmes imposed on it to “co-constructing” its future.

Tristan Puri is a Consultant at Africa Practice specialising in francophone West Africa. He can be contacted at [email protected]