Will Africa overcome poverty in wake of new Paris financial pact?

President William Ruto with France President Emmanuel Macron during the Global Financial Pact Summit in Paris, France.[File, Standard] The finance summit held in Paris, France this week is a turning point for African countries. For decades, the nations have been carrying begging bowls to rich countries seeking aid and development assistance. But resolutions passed in Paris seek to make the continent an equal partner in resolving challenges facing the globe. Among the issues agreed upon was to target a world without poverty, where the most vulnerable are equipped to tackle challenges. Countries agreed to stick together to reform the financial architecture and also agreed on the need for strong financing commitments. Africa, through various forums, has always asked to define its future, to be profiled differently, and to use its green to leverage international trade. Well, the moment of reckoning is here and comes with a cost. On Thursday, President William Ruto led his colleagues in calling for a level playing field. This, he said, can be done in two ways; the first being suspension of debt and reforming of the multilateral lenders and optimising climate financing by coming up with a new financing architecture that is not beholden to any national or shareholders interests. He said African countries were not in Paris to beg but to demand their rightful place at the table. President Ruto called for suspension of debt so that countries can have much-needed credit to address development and emergency needs rather than always ponder on where to get funds to pay the debt. "There is no space for debt anymore, we need to deal with it...our being in debt is not by default, we were set up," he told the Paris delegates. "Give us 10 or 15 years grace period and make the debt a 50-year loan. We start with not paying the money we are supposed to pay next year. What will happen is the money becomes available to us to sort out the immediate issues," he said. The President went further to push for a global financial institution that is not beholden to any national or shareholders' interests saying this is the only way the climate financing project will be realised. He faulted the Paris Agreement of 2015 saying the reason why emissions are going up is because those charged with the financing responsibility have failed to move because of the interests they serve. "Let us have a global financing mechanism. Loss and damage will not do it because it is hostage to national interests. In a contest between national interest and global good, national interests win in the morning," he said. The UN boss Antonio Gutierrez said the changes to the financial architecture should have been done a long time ago as many countries in the south are faced with unimaginable choices. According to the UN boss, leaders are torn between servicing debt and meeting national obligations. And even in servicing this debt, countries in Africa and the Global South pay up to eight times more because lenders capitalise on the element of risk to charge an arm and a leg for loans to the regions. All the leaders at the summit agreed on the need to change systems however the details of this change is what is contentious. Niger President Mohamed Bizoum was categorical that if African countries are asked to substitute thermal energy then it will be resisted for the simple fact that many countries do not have the capacity to shift to green energy overnight. His words were echoed by Senegal President Macky Sall who said the problems that bedevil the continent are on infrastructure, water, and health and that these should be at the fore of development plans. Senegal has entered into a deal with Europe for compensation for its carbon reduction to the tune of 2.5 billion Euros but the leaders feel the shift should be work in progress. Makhtar Diop, managing director of International Finance Corporation, while agreeing with Mali business magnate Jamila Ben Baba, said the solutions for Africa need to be looked at from within the continent. He said lenders are focusing on trillions whereas thousands could have immediate and tangible results. "Multilateral lenders say they will not look at proposals if the project is worth less than a billion dollars. This calls for the continent to think of how countries can aggregate projects to have them more interesting to investors. Instead of a country approaching a lender with a proposal for one desalination plant, why not have 20 such projects across countries that the lenders can fund," said the former World Bank country director in Kenya. AFD CEO Remy Rhoux opines responsibility is for the countries who vote for the leaders who steer development. He says that while the bank contributes both in loans and grants, it is for leaders to be held responsible for matters of development. This, by extension, is the responsibility of the voters to determine a leadership that will have the interest of the populace at heart. "Africa has grown, it is no longer a sorry case. This means the countries will have to shoulder more responsibilities," he said at a press briefing at the bank's headquarters in Paris. Consider getting loans from public banks since private institutions are more expensive. "We do not give dividends to shareholders so we do not have to raise interest rates. Dividend payouts are not part of Public Bank policies so the rates are lower," he added. In a paper, Official Development Assistance at the Age of Consequences, Rioux, with other authors, says the challenges of the 21st century have challenged the Official Development Aid tenets and pushed for a review since the global dynamics have changed significantly since the ODA formation in 1969. Events around the continent paint a picture leaders need to up their governance game if they are to benefit from the new financial architecture. Respect for the rule of law reigns supreme, therefore, scenarios of presidents seeking to influence parliaments on term limits as is the case in Senegal or the myriad coups experienced lately or the attempt by the government to curtail freedom of the press simply because they do not like what is being exposed will have to be stopped if the African countries can realise their desire to sit with the big boys. According to President Macron's advisers, the ball is in the African Court to prove to all and sundry that they can play by the rules. The advisor who cannot be named as he is not authorised to comment on the issues said "The presidents have to agree on what has to be done. You cannot, on the one hand, expect to reap the benefits of the new system while on the other hand continue with the old way of doing things." Another senior French government official said it is for African leaders to step up and prove to the world they are players on a global level. "African Presidents have to rise to the occasion. Relying on external support isn't sustainable. It is time for Africa to carry its own weight.

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