Vera Songwe: “For Africa and Europe, it’s time for action! »

ATWhen a crucial summit between the European Union and the African Union is to be held in Brussels, Africans are seized by both a feeling of hope and also by apprehension mixed with weariness. Hope because the summit is about recovery financing, and sufficient and sustainable recovery financing is exactly what they need. Apprehension, because too many summits have had too little impact in recent years, and too few leaders both north and south of the Mediterranean have apprehended the enormous challenges – but also the even greater opportunities – ahead to Africans at this historic moment in more ways than one.

Questions

In a few decades, the youth of Africa will be about six times more numerous than that of Europe. The creativity of our youth, their dynamism and their ability to solve problems will be essential to meet a multitude of challenges that Europe faces today and will increasingly face in the future. How can we join together to fight against climate change and promote democracy? How do we partner to ensure that health systems ensure the health security of citizens in all regions? How could the dynamism of the African diaspora contribute to reinforcing the dynamism of Europe?

Convergences

Europeans and Africans agree that, globally, we need to invest an average of 2-3% more of global GDP in sustainable infrastructure to avert climate catastrophe and ensure inclusive and inclusive growth. jobs. For African countries, the investment needs are proportionally greater because funding for our recovery has so far been virtually non-existent, our young people have enormous aspirations, and we are starting from a level of investment and income much lower per capita.

A size difference

Today, there is a perilous and dynamic divergence between the pace of recovery of our economies, in that immunization rates are pushing us apart, with the differential in access to fiscal stimulus widening the gap between the pace of the recovery and the quantitative easing measures taken in the United States and Europe, combined with inflationary pressures, are paralyzing our economies. These are all factors that deepen inequalities in the world and, as we are already seeing, that fuel conflicts, as citizens demand more from their leaders.

The need for measures with real impact

The measures that will be adopted in Brussels to deal with these pressures must be different. We need more investment on the order of trillions of dollars in mutually beneficial growth, based on a new vision, inclusive and creating green jobs.

The African Union Action Plan for Green Recovery, combined with the African Continental Free Trade Area, forms the bedrock on which to build this recovery and reset plan. African leaders meeting in Ethiopia in February pledged to accelerate the implementation of these programs. The Brussels Summit provides an opportunity for Europe to join forces with Africa to accelerate action to build a prosperous Africa.

Proposals to make a difference

Here is a critical path of practical decisions that the leaders gathered in Brussels can take to ensure that the summit has immediate utility and impact, which will also help build momentum for more comprehensive action and partnership with Africa.

First, Europe must ensure that African economies can solve their liquidity problems by matching or exceeding China’s offer to recycle at least 25% of their special drawing rights, or 162 billion SDRs out of the 650 billion issued. In line with the Paris Agreement and President Macron’s call, $100 billion of this sum should be allocated to Africa, including vulnerable middle-income countries. Seven European Union countries and the United Kingdom have pledged to recycle SDRs or fiscal equivalents amounting to around $15 billion in SDRs, but more is needed, and the Brussels summit can help do increase the number of commitments in this direction. Ninety-four percent of developed countries’ SDRs are unused, while Africa uses 52% of its SDRs. In Senegal, for example, SDRs have been used to finance the development of pharmaceutical production capacities. These SDRs can be recycled into a number of strategic mechanisms and institutions, namely: the IMF’s Poverty Reduction and Growth Trust Fund, to which countries in need should have rapid access ; the new Resilience and Sustainability Trust Fund, which is a new liquidity and sustainability mechanism to help reduce interest rates for sustainable infrastructure; the African Development Bank and Afreximbank. As these African institutions are at the forefront of green growth and regional trade, their strengthening helps to build more trust and equality in the partnership between the AU and the EU.

Secondly, there is an urgent need to establish a joint working group of African Ministers of Finance to review and revise the Common Framework for Debt Treatment and reinstate the Debt Service Suspension Initiative. Almost a year after its announcement and more than two years after the start of the crisis, many countries in need of orderly deleveraging do not have access to solid and rapid instruments. European creditors could also demonstrate greater creativity in debt forgiveness in exchange for climate change adaptation measures by including this option in the said Common Framework. Establishing a time-bound debt service suspension initiative and expanding eligibility criteria will be key to supporting vulnerable low-income and middle-income countries.

Thirdly, we need an agreement to work with African countries on a credible, transparent and just transition program, which will be presented at the COP to be held in Egypt. African countries have unanimously signed the Paris Agreement to achieve net zero emissions by 2050. To do this, Africa needs a global carbon price that is consistent Paris goals, and a more honest dialogue on adopting a loss and damage compensation mechanism, so that climate-vulnerable countries can be compensated for the impacts of current and past carbon emissions. The EU should also support the call by African leaders for 50% of climate finance to be dedicated to adaptation and come up with credit risk mitigation mechanisms or partial guarantees to increase green bond issuance. and African Blues. In addition, to prevent African countries from being held back in their development, cooking gas and basic energy must be part of the elements financed within the framework of a just transition.

Fourth, the fight against the Covid-19 pandemic continues but, today, more African children are dying of malaria, which means that the health response must be global. Europe must step up its investment program in vaccine production capacities, agree to share intellectual property with African manufacturers and increase funding for African health systems. Germany and the United States are preparing to host key meetings on vaccine equity and the fight against the next pandemic. This AU-EU summit can therefore announce Europe’s collective intention to show greater generosity and work towards collective health security. Europe and Africa must also support the creation of a pandemic preparedness mechanism.

Finally, investment in the real sector must remain a priority. Europe and Africa must commit to deepening their trade partnerships, including supporting the AfCFTA (African Continental Free Trade Area), the development of supply chains that are sustainable, resilient and value-added. The AfCFTA has created enormous investment opportunities. For example, in the transport sector alone, more than $400 billion of investments are needed to take full advantage of the AfCFTA. Joint initiatives by the Africa team and the Europe team, particularly in the areas of energy, transport and digitization, could help accelerate these investments, create jobs, transfer technologies and improve livelihoods for all, especially young people and SMEs. The recently announced “Global Gateway” project is a welcome initiative. For Africa, digitalization is a key pillar to accelerate development and African countries look forward to equal access to the best global technologies to achieve their ambitions.

In return, African governments must continue to improve their governance systems. Critical steps to take relate to improving domestic resource mobilization, tackling illicit financial flows, and opening civic space for more inclusive dialogues. It remains important to facilitate the participation of the private sector and, in particular, to encourage youth entrepreneurship, building on initiatives such as Compact with Africa.

Our global goals, the 2030 Agenda and the Paris agreements, combined with our continental aspirations set out in Agenda 2063, form the basis of a collective, solid and fruitful partnership. The Brussels summit is an opportunity to build confidence after two difficult years in which multilateralism gave way to nationalism. Europe and Africa must not miss this opportunity to relaunch and reset their relations and their economies.