New deal hopes for COVID-battered Africa as Paris summit tackles finance gap

PARIS - Hopes of a financial lifeline for COVID-battered Africa ran high at a summit hosted by President Emmanuel Macron on Tuesday, with the boss of the African Union hailing the talks as a potential "new deal" for the continent.

The summit brings together African leaders and global financial institutions seeking to provide Africa with critical financing after the COVID-19 pandemic depleted the coffers of the world's poorest region.

Africa has so far been less badly hit by the pandemic than other regions - with a total of 130,000 dead compared with 3.4 million worldwide.

But the economic cost has been devastating, with the International Monetary Fund warning in late 2020 that Africa faces a shortfall of  $290 billion up to 2023, undermining all efforts at development.

Democratic Republic of Congo President Felix Tshisekedi, whose country holds the rotating African Union presidency, praised the summit as a "great opportunity" and said Macron was offering a "new deal".

"We will see to what extent we can raise funds to save Africa," said Tshisekedi, adding that the pandemic "left our economies drained because we have had to spend all the little resources we had to fight the disease".

Leaders warned that the risk inequality could open even further as richer countries implement massive stimulus packages while leaving Africa without the financing to keep up robust pre-pandemic growth rates.

"It is a very important moment, we gather here to reverse a process of a very dangerous divergence between advanced economies and developing countries, especially Africa," said IMF chief Kristalina Georgieva in opening comments.

She warned that African economic growth would reach just 3.2 percent this year, far behind the rest of the world's projected six percent. 

Macron said that despite the challenges "Africa has everything to succeed, and the capacity if we collectively decide to propose a new reality".

A moratorium on the service of public debt agreed in April last year by the G20 and the Paris Club - a group of creditor countries that tries to find sustainable solutions for debtor nations - was welcomed but seen as insufficient.

Serge Ekue, the president of the West African Development Bank (BOAD), told press ahead of the meeting that Africa also needed much longer loan maturities going beyond seven years and interest rates of three percent rather than six percent.

"The issue is therefore not so much a moratorium as obtaining low rates. Because it is better to issue new, cheaper and longer debt than to obtain a suspension," he said.

Togo President Faure Gnassingbe announced that his country had secured an additional $240 million package from the IMF.

The summit comes a day after a conference on Monday attended by several heads of state that aimed to rally support for the Sudan government under Prime Minister Abdalla Hamdok in the transition after the 2019 ouster of longtime strongman Omar al-Bashir.

France said it would cancel almost $5 billion in debt owed by Khartoum in order to help a transition Macron described as an "inspiration".

Both meetings, held in a temporary exhibition centre under the shadow of the Eiffel Tower in Paris, are a chance for Macron to show himself as a statesman whose influence in Africa goes beyond the continent's francophone regions.

More than two dozen African heads of state are attending Tuesday's summit, one of the biggest in-person top-level meetings held during the COVID-19 pandemic.

Other key figures attending include South African President Cyril Ramaphosa and his Rwandan, Egyptian and Mozambican counterparts Paul Kagame, Abdel Fattah al-Sisi and Filipe Nyusi.

A French presidential official said Macron and Nyusi, whose country is battling a bloody Islamist insurrection in its north, would hold a bilateral meeting on Tuesday.

The official said the summit would also be a chance for the international community to coordinate efforts to help Mozambique.

French Finance Minister Bruno Le Maire told RFI radio funding was needed to finance anti-terror campaigns, particularly important as "the epicentre of terrorism has moved from the Middle East".

The IMF's Georgieva added: "Growth in Africa means stability in Europe".