French President Emmanuel Macron is hosting leaders of African countries and heads of global financial institutions for a summit that will seek to provide the continent with critical financing swept away by the impact of COVID-19.
Some two dozen African heads of state are attending Tuesday’s summit in Paris, one of the biggest in-person top-level meetings held during the pandemic. International financial leaders attending, included International Monetary Fund (IMF) chief Kristalina Georgieva as well as World Bank managing director of operations Axel van Trotsenburg.
The summit got under way at 11:00 GMT and is due to wind up with a 16:00 GMT press conference by Macron and Democratic Republic of the Congo President Felix Tshisekedi, whose country holds the rotating African Union presidency.
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.
However, the economic cost is only too apparent, with the IMF warning in late 2020 that Africa faces a shortfall in the funds needed for future development – a financial gap – of $290bn up to 2023.
A moratorium on the servicing 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”.
‘Lower interest rates needed’
Serge Ekue, the president of the West African Development Bank (BOAD), told the AFP news agency that Africa needed much longer loan maturities that went beyond seven years and interest rates that were 3 percent rather than 6 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 economic 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 Sudanese government under Prime Minister Abdalla Hamdok in the transition after the 2019 removal of longtime leader Omar al-Bashir.
Macron notably announced that France would cancel almost $5bn in debt owed by Khartoum in order to help a transition he described as an “inspiration”.