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More than 20 African heads of state and top officials from European governments, the European Union and the International Monetary Fund agreed Tuesday to seek an additional $100 billion for reviving Africa’s economies crippled by the COVID-19 pandemic.
French President Emmanuel Macron hosted the Paris summit aimed at finding ways to help Africa face the crisis and return to growth, with the support of international organizations, including the IMF, the World Bank and the African Union.
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Macron called on the international community to set a “new deal” for Africa nations. He said the financing needs of the continent are estimated at about $300 billion by 2025.
“This moment may be an opportunity to finally respond to huge challenges” Africa is facing, he said at a news conference. Economies in sub-Saharan Africa together shrank 1.9 percent last year in an unprecedented recession.
Participants also agreed Africa should be able to “massively” produce vaccines on the continent for its own population, notably via technology transfers and lifting barriers to intellectual property, Macron said.
IMF Managing Director Kristalina Georgieva confirmed the organization will issue this year $650 billion worldwide in special drawing rights, a foreign exchange tool used to help finance imports. That would include $33 billion for the African continent.
Participants agreed Tuesday to seek to triple the amount and reach $100 billion via the reallocation to African nations of some of the money initially meant to go to advanced economies.
France and other European countries are ready to contribute and a discussion is starting, especially with the US, to reach a deal by this autumn, Macron said.
“Let’s be very clear: No, it is not enough,” Georgieva said. “We have to bring financing from developing organizations. … We have to make the private sector attractive.”
Georgieva warned against a “dangerous divergence” between advanced economies and developing countries, especially Africa.
The European Union last year adopted a 750 billion euro ($910 billion) pandemic recovery plan. The US Congress approved a $1.9 trillion coronavirus relief bill in March.
“This is a great opportunity for Africa,” said Congolese President Felix Tshisekedi, the current head of the African Union. The pandemic “left our economies impoverished because we had to use all the means we had, the few means we had, to fight against the disease.”
Leaders also discussed ways to relieve the debt of African nations and how to reduce interest rates for Africa’s private sector to boost investment and growth.
EU Commission President Ursula von der Leyen announced a new initiative to mobilize “substantial financing and technical expertise to address key bottlenecks that hold back young entrepreneurs and small business owners across Africa.”
Senegalese economist Khadim Bamba Diagne said that “the big problem that we have is that we have a very young population that is not working because all the markets have been taken over by foreign companies, especially because the debts are conditioned: ‘I lend to you and in return it is my companies that are going to dominate the markets.’”
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