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Summit on the Financing of African Economies, Paris, 18 May 2021: Declaration

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The Covid-19 pandemic has led to an unprecedented economic crisis worldwide, with disastrous social consequences. After 25 years of continuous growth, Africa is severely hit and has suffered a recession in 2020. The International Monetary Fund (IMF) estimates that additional financing of up to $285 billion would be needed during 2021-25 for African countries to step up the spending response to the pandemic, with about half of it for African low-income countries. The middle-income countries also require special attention. Absent a collective action, the financing and objectives of the 2030 Agenda for Sustainable Development and the African Union’s 2063 Agenda will be compromised.

Most regions of the world are now launching massive post-pandemic recovery plans, using their huge monetary and fiscal instruments. But most African economies suffer the lack of adequate capacities and such instruments to do the same. We cannot afford leaving the African economies behind.

We, the Leaders participating to the Summit, in the presence of international organizations, share the responsibility to act together and fight the great divergence that is happening between countries and within countries.

This requires collective action to build a very substantial financial package, to provide a much-needed economic stimulus as well as the means to invest for a better future. Our ambition is to address immediate financing needs, to strengthen the capacity of African governments to support a strong and sustainable economic recovery and to reinforce the vibrant African private sector, as a long-term growth driver for Africa.

In the very short term, solving the pandemic remains the top priority. We recognize the role of extensive immunization against Covid-19 as a global public good, and stand united to ensure equitable access in Africa to safe and affordable vaccines, treatments and diagnostics through the ACT-Accelerator and its COVAX facility, as well as through the African Union’s AVATT. We will strive to accelerate these efforts, to make sure more vaccines are allocated to Africa, including through dose sharing, supporting advance market commitments and facilitating trade along the entire value chain, as well as building the local capacities needed to distribute vaccines. We also need, in partnership with the private sector, to speed up vaccine production, by developing local manufacturing capacities in Africa. This can be facilitated by voluntarily sharing intellectual property and actively transferring technologies and know-how, consistent with international legal frameworks, such as through entering into license pooling and manufacturing agreements to enable local production.

We will leverage on the international financial system to create the much-needed fiscal space for African economies. We call for the swift decision on and implementation of an unprecedented general allocation of IMF’s Special Drawing Rights (SDRs) that is expected to amount to $650 billion, of which about $33 billion to increase reserve assets of African countries, and urge countries to utilize these new resources transparently and effectively. We are determined to significantly magnify its impact for Africa, by exploring on-lending SDRs on a voluntary basis through the IMF’s Poverty Reduction and Growth Trust (PRGT), and by exploring a range of additional options with the IMF, World Bank and other MDBs to enable possible on-lending of SDRs to support IMF members’ green, resilient and inclusive recovery, as we emerge from the pandemic, in line with Sustainable Development Goals. This support will be complemented by official development assistance (ODA), an ambitious IDA-20 replenishment, the future ADF-16 replenishment in 2022 and the mobilization of scaled-up concessional financing from the IMF, MDBs and funds, as well as bilateral development agencies. We ask the MDBs to mobilize more private financing into Africa by developing and reinforcing the relevant risk sharing instruments.

This multilateral effort will be closely articulated with the network of African Public Development Banks (PDBs), mobilizing the African Development Bank (AfDB) as well as sub-regional and national public financial institutions. Deeply rooted in their respective constituencies, their ability to originate more quality projects notably for climate, health, education, infrastructure and the private sector is a prerequisite for the success of all international measures taken to effectively financing African economies.

To relieve African economies suffering from external public debt vulnerabilities, G20 and Paris Club creditors are acting upon the agreement as stated in the April G20 FMCBG communiqué, and in the Common Framework for Debt Treatments beyond the Debt Service Suspension Initiative (DSSI) adopted in November 2020.

To boost growth and jobs, we support the African national strategies and we welcome the ambition to develop an Alliance for Entrepreneurship in Africa, with a broad pan African reach and a strong business focus. The Alliance will help mobilize all partners ready to support, through financial and technical resources, the development of the African private sector, micro, small & medium-sized enterprises (MSMEs), including women entrepreneurs promoted by the Affirmative Finance Action for Women in Africa (AFAWA). We look forward to the IFC, in coordination with the AfDB, the EBRD in its countries of operations, the EIB and other relevant MDBs and interested bilateral DFIs to advance efforts to launch this Alliance, in collaboration with the African Union Commission, in a progressive and targeted way. This builds on the efforts made under a Team Europe approach with the European DFIs in the context of contributing to the objectives of this Summit.

We reiterate our continued support for the G20 Initiative on Supporting the Industrialization in Africa and LDCs, G20 Africa Partnership and the Compact with Africa (CwA), and other relevant initiatives. Given the importance of private sector reform to recovery and long-term prosperity, we take note of the joint proposal of France and Germany for further strengthening the G20 initiative Compact with Africa.

We welcome the implementation of the African Continental Free Trade Agreement and the digital transformation of the continent to close the digital divide and accelerate adoption of open, fair and non-discriminatory digital ecosystems, which will lead to significant gains in terms of productivity, innovation and durable growth. In light of our joint belief in the developmental impact of trade, we will explore options that would enhance African value-added in global supply chains.

While international support is required to fuel recovery plans of the scale that is needed, it could be accompanied by more flexibility on debt and deficit ceilings where appropriate, alongside necessary reforms at the national level, with the assistance of the international community when needed. Financing key public policies for an inclusive and sustainable growth like education, health, social protection and infrastructure will require greater mobilization of domestic resources, increasing transparency and efficiency of public debt management and expenditure, improving governance and financial integrity, and developing the enabling environment for private sector solutions through PPPs and commercial financing. We will also improve infrastructure project preparation and financing.

We will promote the sustainable, circular and low carbon development pathways of Africa and ensure its climatic and environmental resilience for the next decades. We will strive to widen the donor and investor base for climate and biodiversity finance and for technological development in Africa, including by channeling more resources to the continent through the Green Climate Fund and the Global Environment Facility. We also call on the IFIs to set ambitious targets for their projects related to climate, with a balance between adaptation and mitigation, and to fully align their operations with the Paris Agreement, as soon as possible.

Ultimately, growth and resilience rely on human capital. Our overarching objective is to tap the human capital and demographic potential of Africa and to provide the private sector with the assets it needs. We commit to strengthen health and social protection systems and education and training institutions on the African continent, recognizing that they are key factors to increase productivity on the continent and to ensure economic resilience by protecting the African lives, jobs and skills.

We will work together to increase the mobilization of African talents and strengthen public sector expertise and local resources and knowledge. We believe that country engagement is essential and the set of actions we commit to must be supported by strong capacity development. We will work to develop and mobilize African expertise, within and outside the continent.

Investing in African economies’ sustainable development and their active and growing labor force today will contribute to making Africa the next champion of global growth.

In the margins of the next IMF/WBG Annual meetings in October 2021 there will be an opportunity to take stock of our efforts to ensure the effective implementation of these measures and to refine our proposed initiatives.