African Reserves Loans

The world cannot afford to leave Africa behind in post-COVID recovery

By Alassane Dramane Ouattara

President of Côte d’Ivoire.

The COVID-19 pandemic has resulted in an unprecedented global health, social and economic crisis. In 2020, sub-Saharan Africa experienced the worst underperformance on record, with a growth rate of -1.9%, coupled with an increase of 32 million people living in extreme poverty.

Health systems, education and other essential services have been massively disrupted. In addition, the rush by developed countries to secure supplies of medical equipment and vaccines has caused severe shortages in low- and middle-income countries, leading to much worse health outcomes and widening inequalities.

While most regions of the world have eased budgetary constraints to make unprecedented financing available to their populations and businesses, and to support their recovery policies, most African countries lack flexibility and instruments for them. imitate. They are also unfortunately facing an increase in terrorist attacks.

Let us never forget that poverty is one of the main causes of terrorism and migration.

Generous rhetoric is not enough

Given the additional financing needs of up to $ 285 billion, estimated by the International Monetary Fund (IMF) over the next five years, to fight the pandemic and accelerate economic recovery, African countries need, in addition to their own national efforts, increased support from all their partners. Of course, the resources will be used in a transparent and efficient manner.

We welcome the global efforts already made in terms of vaccine supply, debt and financing, in particular the unprecedented $ 650 billion in Special Drawing Rights (SDRs) from the IMF, of which around $ 33 billion ( or 5.1%) have been allocated to African countries.

We also fully support the decisions and commitments of the Paris Summit in May 2021 on financing African economies to meet immediate needs and strengthen the African private sector, the foundation of Africa’s long-term growth; in particular, collective decisions (i) to explore the voluntary reallocation of SDRs, from countries with comfortable external reserves to African countries, through concessional loans; (ii) support an ambitious replenishment of IDA20; and (iii) support long-term growth driven by the private sector, in particular SMEs and local vaccine production.

However, if generous rhetoric alone was the solution to helping African countries overcome the pandemic and join the post-COVID-19 global economic recovery, the outlook would be encouraging. But this is not enough and we must act now.

From words to deeds

The global community has an opportunity to deliver on these commitments and turn words into action, especially during the 20th Replenishment of a 60-year-old World Bank program known as the International Development Association (IDA) .

IDA provides low-interest or no-interest grants and loans to 74 eligible low- and middle-income countries for projects and programs that boost economic growth, reduce poverty and improve the lives of vulnerable people. .

Several African heads of state joined me in Abidjan in July to publish the Abidjan Declaration, which identifies key priorities for financing in Africa and calls for an ambitious replenishment of IDA20.

The funding process that started in Abidjan will end at the end of this year with a policy and funding package to support specific projects in the 74 IDA countries over the next three years. The goal is an IDA20 replenishment envelope of at least $ 100 billion over three years, which would be the largest in IDA history.

This is a good opportunity to demonstrate that solidarity is essential for the good of all and that we can act together to return to the path of income convergence on which we were before the pandemic, and to build a more secure and secure world. more prosperous.

We know that when the World Bank has the support of all of its stakeholders, it has the capacity to make a difference.

* This article was first published by the World Economic Forum.

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