“We cannot afford leaving the African economies behind” is stated in the preamble of the declaration of the Summit on the Financing of African Economies held in Paris on 18 May. With this statement, the 30 Heads of State and Government and leaders of international organisations who attended the Summit hosted by the French President Emmanuel Macron set the tone for the future of the continent. The Summit is the first high-level international rendez-vous organised in France since the outbreak of the Covid-19 pandemic and it is of symbolic importance that this first meeting targets Africa. The aim is to provide financial resources capable of reviving the economy of the continent after the Covid-19 pandemic and to build back better.
“A New Deal for Africa and by Africa”
In the press conference that followed the Summit, the French President proudly declared that the Summit represents “a New Deal for Africa and by Africa”. The participants endorsed a joint declaration that addresses both the immediate challenges posed by the pandemic, such as access to vaccination for African countries, as well as the long-term economic challenges, such as the need to mobilise financial resources to support a sustainable, inclusive and green recovery and encourage growth driven by a vibrant private sector.
The declaration acknowledges that international effort is required to support recovery plans, accompanied by more flexibility on debt and deficit ceilings as well as necessary reforms at the national level. “We will leverage on the international financial system to create the much-needed fiscal space for African economies,” states the closing declaration (read more here). As a consequence, the leaders called for the swift decision on and implementation of a general allocation of the IMF’s special drawing rights (SDRs) of $650 billion, which is expected to increase reserve assets of African states by $33 billion. The French President announced that there was an agreement to work towards persuading rich nations to reallocate $100 billion of SDRs to Africa.
Domestic revenue mobilisation at the center of recovery plans for African economies
Nonetheless, the summit was not only about international support but also about the necessity of national reforms and policy responses. Here, measures on domestic revenue mobilisation or DRM are at the heart of the summit participants' efforts. The declaration states that financing key public policies will require greater mobilisation of domestic resources, as well as increasing transparency and efficiency of public expenditures. In this regard, the work of the Addis Tax Initiative (ATI) is highlighted. The participants of the summit welcome the efforts and progress made in the mainstreaming of the implementation of the Addis Ababa Action Agenda and the recent launch of the ATI Declaration 2025. These initiatives are considered valuable steps in order to enhance domestic resource mobilisation through sustainable, transparent and accountable tax systems and thus contribute to tackle the challenges of the pandemic in Africa.