France among nations seeking to triple Africa’s share of new IMF funding

IMF Ooo The IMF estimates the continent faces a funding gap of US$345 billion through to 2023

Wed, 19 May 2021 Source: bloomberg.com

France has called on other rich countries to follow its example and commit to reallocating part of their International Monetary Fund special drawing rights to Africa, so the continent can triple its share of new funding support.

Africa is earmarked to receive $33 billion out of an injection of $650 billion the IMF is preparing to give out to its member countries later this year. A collective effort is underway to boost that amount to $100 billion, President Emmanuel Macron says in a live-streamed conference.

“We have decided to work together over the next weeks to reach a political agreement” by October, Macron said. “We need to more than triple the natural envelope that would have gone to Africa,” he said.

The summit drew participation from IMF Managing Director Kristalina Georgieva, German Chancellor Angela Merkel, U.S. Treasury Secretary Janet Yellen, and Vice Premier Han Zheng of China, the world’s top bilateral lender to developing economies.

While Macron said the meeting led to “a change of mindset,” it stopped short of securing the financial firepower African economies need. The IMF estimates the continent faces a funding gap of $345 billion through to 2023.

Africa’s $33 billion is a “drop in the ocean,” Senegalese President Macky Sall said at the conference.

The mixed outcome comes as France seeks to broaden its regional influence beyond its French-speaking former colonies. The leaders of Africa’s two biggest economies, Nigerian President Muhammadu Buhari and South African President Cyril Ramaphosa attended the summit.

While less than 150,000 people have died from the coronavirus in Africa, the pandemic has hurt incomes, including export and tourism revenues, pushing millions back into poverty.

Africa needs about $285 billion of new funding through 2025 to address the pandemic alone, Georgieva said in an earlier statement Tuesday. “This is the bare minimum,” she said. “To do more – to get African nations back on their previous path of catching up with wealthy countries – will cost roughly twice as much.”

Vaccine Production

The summit called for support for Africa’s vaccine production by “voluntarily sharing intellectual property and actively transferring technologies,” a statement shared by Macron’s office said. This can be done “by entering into license pooling and manufacturing agreements,” it said.

Such arrangements would help African countries to manufacture their own vaccines - a key issue on a continent where less than 2% of the population has received a shot. That compares with 36% of Europeans who have so far been given a dose.

The summit ended a day after Macron announced France would also be in favor of canceling $5 billion of Sudan’s debt to support the reconstruction of the country that’s emerging from decades of dictatorship.

Source: bloomberg.com
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