MACRON HOSTS SUMMIT ON POST-COVID AFRICA FINANCE
French President Emmanuel Macron, Tuesday, hosts African leaders and chiefs of global financial institutions for a summit meeting that will seek to provide Africa with critical financing swept away by the Covid-19 pandemic. Africa has so far been less badly hit by the pandemic than other global regions — with a total of 130,000 dead across the continent.
But the economic cost is only too apparent, with the International Monetary Fund warning in late 2020 that Africa faces a shortfall in the funds needed for future development a financial gap of $290 billion up to 2023. A moratorium on the service of public debt agreed in April last year by the G20 and the Paris Club, a group of creditor countries that tries to find sustainable solutions for debtor nations, was welcomed but will not be enough on its own.
Many want a moratorium on the service of all external debt until the end of the pandemic. “We are collectively in the process of abandoning Africa by using solutions that date from the 1960s,” Macron said last month, warning that failure would lead to reduced economic opportunity, sudden migration flows and even the expansion of terrorism.
Serge Ekue, the president of the West African Development Bank (BOAD), told AFP that Africa needed much longer loan maturities that go beyond seven years and interest rates that are 3.0 percent rather than 6.0 percent. “In West Africa, the average age is 20. You walk in (Ivory Coast’s biggest city) Abidjan and there is incredible energy,” he said, noting that Africa had seen growth rates of 5-6 percent in the last years.
“The issue is therefore not so much a moratorium as obtaining low rates. Because it is better to issue new, cheaper and longer debt than to obtain a suspension,” he said. The summit comes a day after a conference on Monday attended by several heads of state that aimed at rallying support for the Sudan government under Prime Minister Abdalla Hamdok in the transition after the 2019 ousting of longtime strongman Omar al-Bashir.
Macron notably announced that France would cancel almost $5 billion in debt owed by Khartoum in order to help a transition he described as an “inspiration”. Both meetings, held in a temporary exhibition centre under the shadow of the Eiffel Tower in Paris, are a chance for Macron to show himself as a statesman on Africa whose influence goes beyond the continent’s francophone regions. With some two dozen African heads of state due to attend Tuesday’s summit, it will be one of the biggest in-person top-level meetings held during the Covid-19 pandemic. Other key figures attending include Rwandan President, Paul Kagame and Egyptian President, Abdel Fattah al-Sisi.