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Growth and debt relief measures at the centre of the Summit on Financing African Economies

Today, 18 May 2021, Paris will host the Summit on Financing African Economies, which will welcome leaders of African and international organisations such as the UN, IMF, OECD, WTO and the World Bank, as well as  African Heads of State and Governments and member of the G7 and G20. The aim of this Summit is to plan joint actions that will help boost recovery in Africa in the post-pandemic, helping the continent to put in place a bold support package, leading countries back to growth in 2022.

The main challenge will be to attract liquidity in Africa both into the public and private sectors, penalised by risk premiums that increase interest rates. France has already proposed to reallocate to Africa IMF Special Drawing Rights (SDRs), foreign exchange instruments that can be used to finance imports, also suggesting a sale of IMF gold to fund zero-interest loans for African. In June, the IMF will also decide on a $650 billion SDR issue, of which $34 billion would be allocated to Africa and $24 billion to sub-Saharan Africa.

Other possibilities include debt relief by bringing together a mix of public and private creditors, together with targeted measures to support the region’s small and medium-sized firms.

Among the participants in person are the leaders of Angola, Burkina Faso, the Democratic Republic of Congo, Côte d’Ivoire, Egypt, Ethiopia, Ghana, Mali, Mauritania, Mozambique, Nigeria, Rwanda, Senegal, Sudan, Togo and Tunisia and on the European side, Italy, Spain and Portugal.

SOURCE: www.eib.org