Africa is a continent with its specificities. Talk of the so called Black Continent and minds will run to all directions of thoughts. Some will quickly project it from its World position as the second largest and second most populous continent after Asia. Many will remember it as the continent with the youngest population. Yet others will talk of its wide range of natural resources and the fact that these resources have not stopped it from being the least wealthy continent per capita. What remains interesting about Africa is the fact that despite the low concentration of wealth recent economic expansion, the large and young population and several other teething factors have rendered it an important economic market in the broader global context. This surely explains the growing concern over the consequences of the Corona virus pandemic despite its meager health hazard in Africa compared to other continents.
The devastating economic consequences of COVID-19 on Africa will surely have serious repercussions elsewhere. The convening of the Paris Economic Summit by French President Emmanuel Macron that witnessed the participation of European and African leaders set out to attenuate such consequences. In fact, the International Monetary Fund did its calculation and expressed the fear that African economies might run into a “financial gap” of an estimated 290 billion dollars by 2023. That notwithstanding, there is a glimmer of hope. Economic growth in the continent which experienced its first recession last year, is expected to rebound to 3.4 per cent this year and 4 per cent in 2022. In effect, a memorandum on debt servicing put in place in April 2020 by the G20 countries and Paris Club group of creditor nations, has given Africa a bit of breathing space suspending the repayment of 6.9 billion dollars by 50 countries. But this air of relief remains worrying for, debt suspension is not debt cancellation.
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Africa’s New Deal as conceived in Paris and signed by several leaders including President Paul Biya focuses on a number of issues most of which are driven by the continent’s specificities. As the saying goes, it is better to teach someone how to fish than to provide him with it. The leaders who converged in Paris think it will be appropriate as a move to reduce the shocks Africa might have from the consequences of COVID-19 if the World Health Organisation allows for the transfer of intellectual property to enable Africa acquire the technology to produce its vaccine. The second aspect of the New Deal resides on the continent stepping up investment in the health and education sectors and climate change as well. The Paris summit has enabled Africa to get into a new financial deal for the allocation of 650 billion Drawing Rights for which 33 billion will benefit the continent.
The Covid-19 pandemic has surely pushed the World into a pit of redirected cash flow. From every indication, it is like a hot potato in the mouth of African nations. The new indebtedness appears to be a trap, reason why Africa must bring its own way of handling the problem. As a rich continent in terms of resources, it equally boasts of solid national financial institutions that need to be brought into the whole fight. The challenge is there and must be tackled squarely without necessarily depending fully on the outside World. But if they must depend, for, no nation can live in isolation, they must ensure the debt incurred yields that are commensurate to set objective.
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