French Finance Minister Bruno Le Maire warned on Wednesday that peace, security and global stability are at risk if the world’s economic superpowers do not contribute to Africa’s economic recovery from the Covid-19 crisis.
The African heads of state and government have met over the past two days in Paris at a summit convened by France to conclude a multi-billion dollar “New Deal” in support of the economic and health recovery of the continent.
The Summit on Financing African Economies brought together 21 African heads of state and continental organization leaders along with European leaders and the heads of major international financial organizations. In a press conference on Tuesday evening, French President Emmanuel Macron said the summit had brought about “a New Deal for Africa and Africa”.
The signatories called for additional IMF Special Drawing Rights of US $ 650 billion to be released to bridge the gap between developed and emerging economies. However, only $ 33 billion of that is earmarked for African countries, and European leaders have vowed to donate their own shares to bring the total for the continent to nearly $ 100 billion.
The IMF could also bring in part of its gold reserves and, in a joint communique, after the summit leaders suggested using “flexibility on debt and deficit ceilings” to further ease the burden.
G-7 and G-20 are invited to contribute
Le Maire announced on Wednesday that the French government would be pushing for larger contributions from other major economies at the upcoming G7 (Group of Seven) summit in the UK in mid-June and would also address the G20.
“Developed countries have invested more than 25% of their GDP to combat the aftermath of the crisis and have a very strong economic recovery. In Africa it is less than 2% of their GDP,” Le Maire told CNBC’s Steve Sedgwick. In addition, this development risked great divergence in the recovery of economies and health systems.
Workers transport the second shipment of the Johnson & Johnson Covid-19 coronavirus vaccine after it arrives at O R Tambo International Airport in Johannesburg on February 27, 2021.
Kim Ludbrook | AFP | Getty Images
“This would be a very important threat not only from an economic point of view, but also a real threat to security, peace, stability and illegal immigration. I therefore urge everyone to be aware of the current situation in African countries and to be aware of the need to put more money in Africa. “
He suggested that governments not only provide grants, but invest in small and medium-sized enterprises to support African entrepreneurs who are “at the center of economic recovery”.
Despite the comparatively low Covid-19 infection and mortality rate compared to the rest of the world, the IMF is forecasting a 3.3% decline in economic activity in sub-Saharan Africa in 2020, the region’s first recession in 25 years. The GDP growth projections for 2021 are also well below the other global estimate of 6%.
The decline in activity is projected to cost the region $ 115 billion in lost production this year and could drive another 40 million people into poverty and effectively wipe out five years of progress against poverty.
In Tuesday’s press conference, Macron also set a target of vaccinating 40% of the African population by the end of 2021, describing the current situation as “unfair and inefficient”.
The summit has called on the World Health Organization, World Trade Organization and the drug patent pool to remove intellectual property patents that block the manufacture of certain vaccines.
IMF chief Kristalina Georgieva warned on Tuesday of the serious global economic consequences if the introduction of vaccines in developing countries fails and the health crisis persists.
South African President Cyril Ramaphosa told France24 on Wednesday that he welcomed the group’s call for large economies in the northern hemisphere to share their vaccine supplies.
“They have a huge surplus and we don’t have access, and that for me is vaccine apartheid and it can also be called vaccine imperialism,” Ramaphosa said.
“We will never be able to defeat the Covid-19 pandemic if we try to defeat it only in the northern hemisphere and not in the south.”
A groundbreaking proposal The waiver of intellectual property rights in Covid-19 vaccines was jointly presented to the World Trade Organization by India and South Africa in October.
However, a few months later, it continues to be blocked by a small number of governments. These include Great Britain, Switzerland, Japan, Norway, Canada, Australia, Brazil, the EU and – until recently – The United States.