At the summit in Paris on Africa financing, Emmanuel Macron, President of France, agreed to work towards convincing rich nations to reallocate $100 billion in their IMF special drawing rights (SDR) to African states by October and stating in agreement with other African and European leaders at the summit, that impoverished African states must not be left behind in the post-pandemic economic recovery.
The event was, however, held as part of Macron’s efforts to fulfilling France’s engagement in Africa at a time when the African continent was faced with near $300 billion deficit by the end of 2023 in the process to heal from the downturn. Macron further stated that the European nation has made its decision to redirect its SDRs and there had been an agreement to get this developed nations to redirect their reserves in the Fund to Africa.
“Our work in the next few weeks will be to make the same rate of effort as France, starting with the United States of America, and I know all the work that we will have to do with Congress and the executive, but I am confident,” he said.
Further addressing the questions on reallocating IMF reserves (SDRs) to developing nations, the communique from the summit showed a light concrete agreement. It can be recalled that the IMF and World Bank chiefs had come to agreement last month to boosting SDRs by $650 with the extension of a debt-servicing freeze to developing countries to help them deal the pandemic. However, a total of $34 billion was earmarked for Africa.
Also, at the summit, was Kristalina Georgieva, the International Monetary fund (IMF) president, who revealed that it was time to stem the “dangerous divergence between advanced economies and developing countries, especially (in) Africa,” and further projecting that Africa’s GDP would increase by only 3.2 per cent in 2021 as against the 6 per cent projected for the rest of the world.
“On the $100 billion, is it enough? Let’s be very clear, no it is not enough. We have a financial gap just to catch up with the impact of COVID for the continent of Africa of $285 billion. It is genuinely an all-hands-on-deck situation. We have to make the private sector attracted to go into a risky environment by de-risking investments,” she said.