With the “Covid-19 - Health in Common” initiative launched on April 9, AFD undertook to raise €1.2 billion by September 2020. Just three months after its launch, the initiative has already provided aid to 24 projects in 15 African countries, in response to the Covid-19 pandemic, for a total of €512 million, including €57 million in donations and €455 million in loans to States and to AFD’s partner public development banks.
The aim of this initiative is to:
- Support local institutions in the detection of the disease:
In order to avoid the spread of the virus across the continent, the initial grants were allocated for projects that equip laboratories, and bolster the capacity to produce inexpensive tests. Some €12 million was thus granted to recognized partners, including five establishments in the Pasteur Institute network.
- Contribute to the funding of response plans in Sahelian partner countries:
This form of support from AFD was implemented in Mauritania, Niger, Burkina Faso and Chad. In Chad, €7.5 M was raised to support the national response to COVID-19.
- Provide loans to public stakeholders for a resilient and sustainable economy:
The “Covid-19 - Health in Common” initiative provides for €1 billion in loans to government and public development banks on the African continent. In Rwanda, the government was granted a €40 M loan to meet the funding needs of health and social programs in response to the pandemic.
As part of the “Covid-119 - Health in Common” initiative, and to strengthen the capacities of African health systems, Expertise France has set up a technical assistance platform, “EF COVID - Health”. Consisting of a documentary database and a network of experts in partner countries, the platform provides support to these countries and a means of exchange between technical and financial partners mobilized in the Covid-19 crisis.
In addition, Expertise France is in a position to provide immediate technical assistance in the management of the economic consequences of the pandemic. This assistance aims to support States in the design and implementation of economic recovery policies, and targets in particular taxation and customs issues, budget management, the execution of public spending and support for the private sector.
The AFD Group, with its Proparco subsidiary, is supporting African entrepreneurs
The African private sector is suffering the economic impacts of this pandemic. The small and medium businesses (SME) of the continent are the first and hardest hit, while they represent 60% of formal employment and contribute approximately 40% to national GNPs.
The AFD Group, via its Proparco subsidiary, is pursuing its “Choose Africa” program, launched in March 2019 and aimed at supporting business owners. This engagement goes towards safeguarding employment and the contribution of businesses to local economies.
Financial solutions are thus on offer to its clients, SMEs for the most part (loans, warranties, equity and grants). In addition to this financial aid, Proparco guides its partners in matters of governance, financial risk and employment safeguarding in sectors weakened by the crisis (agri-industry, tourism and education, etc.).
Through “Choose Africa”, Proparco has already committed €1.3 billion in aid since its launch. This program has lent its support to more than 5,600 businesses and has saved or created 1.3 million direct and indirect jobs.
Among the projects funded in the context of the pandemic, Proparco signed a loan agreement in May for €10 million to the Cofina group in Senegal and the Ivory Coast, in order to support the financial integration of SMEs and the informal sector.
Development banks, the key players in sustainable recovery
Lastly, the AFD Group is working alongside partner public development banks, and more especially African banks, with a view to building a sustainable response to the economic and social crises. The West African Development Bank (BOAD), has, for instance, received a €175 M loan to finance recovery plans for Member States of the West African Economic and Monetary Union (WAEMU).
The current volume of activity of these institutions represents an annual $2,300 billion, i.e. 10% of the annual amount of investment throughout the world. Public development banks are therefore more apt than ever to foster the reconciliation between short-term responses to Covid-19-related crises and long-term solutions for sustainable development.
Public development banks can enable institutional changes and provide crucial economic opportunities for the achievement of the SDG. Some 450 public development banks will meet together for the first time next November 12, in the framework of the “Finance in Common” Summit, as part of the Paris Peace Forum.
In bringing these institutions from the world over together, “Finance in Common” will enable:
- The building of a stakeholders’ coalition and the creation of an active collective to promote the emergence of a global response to global issues;
- The demonstration of the potential of public development banks to link short-term needs and long-term transformations, by re-directing financial flows towards the SDG.
“Since the beginning of the outbreak, AFD has been engaged with its African partners in building a coherent response to the challenges raised by the COVID-19 crisis. This is the goal of the “Health in Common” initiative, which has raised more than €500 million in less than three months, in other words, half of the anticipated €1 billion in the framework of this initiative. Rolled out immediately, these funds help to tackle the health crisis and prepare a sustainable economic recovery on the ground,” says Rémy Rioux, CEO of the Agence Française de Développement.
About the Agence Française de Développement Group
Agence Française de Développement (AFD) is a public financial institution that finances, supports and accelerates transitions towards a more just and sustainable world. As a French overseas aid platform for sustainable development and investment, we and our partners create shared solutions, with and for the people of the global South.
Our teams are active in more than 4,000 projects in the field – in the French overseas departments and some 115 countries.
Press contact: Insaf Rezagui – email@example.com – +33 (0)6 09 30 66 91