PREVIEW
German-hosted G7 summit ramps up sanctions on Moscow and suspends green energy transition timetable
A US$600 billion package of infrastructure funding from the European Union and the United States emerged as the headline deal for Africa and other developing regions at the G7 industrial countries' summit on 26-28 June in the Bavarian Alps.
The package formally launched by US President Joe Biden at the summit as the Partnership for Global Infrastructure and Investment (PGII) is to be financed with public and private funds: $300bn from the EU, $200bn from the US, and $100bn from Britain and others.
It is a revival of the west's planned response to China's Belt and Road Initiative (BRI) infrastructure network which stretches from east Asia, via eastern Africa to Europe.
But the PGII and the EU's Global Gateway, which also aims to compete with China, are medium-term programmes, given the probable timeline for raising private funds under the currently difficult financial conditions. And despite the fanfare, some of Global Gateway funds were just repackaged projects.
Biden highlighted a few of the initiative's new flagship plans such as a $3bn solar power scheme in Angola, a public health project in Côte d'Ivoire and more funding for the Institut Pasteur's vaccine development project in Senegal.
On the more immediate demands from Africa and developing regions for the G7 to do more to ease the knock-on effects of Moscow's war on Ukraine, the summit came up with a disappointing $4.5bn.
That has to be set against the World Food Programme's estimates that it needs at least $21.5bn in extra funding this year just to keep pace with rising prices and logistics problems. Without more help, some 320 million people will face chronic food shortages this year, the WFP has warned.
Senegal's President Macky Sall, who chairs the African Union this year, told the summit that economies in his region were caught between the hammer of Russian President Vladimir Putin's war on Ukraine and the anvil of sanctions on Moscow, which have triggered widespread disruptions of supply chains.
The EU has set up a €250m fund to help countries struggling to import wheat and grain but its scope is limited to north Africa. This week, Egypt bought 815,000 tonnes of wheat, its largest single purchase for a decade. And the World Bank is lending Egypt, already the second biggest borrower after Argentina from the International Monetary Fund, $500m to boost food security.
That gives a sense of how much will be required for the entire African continent. On 24 June, Germany's foreign minister Annalena Baerbock hosted a global food security conference with agriculture and development ministers to look at ways to expand wheat, maize and other cereal production and distribution on the continent.
'As we discuss "near-shoring" to build better trade resilience, exploiting better Africa's agriculture potential for global food production is a must,' said Baerbock.
South Africa's President Cyril Ramaphosa also attended the summit, urging the G7 countries, along with World Trade Organization director-general Ngozi Okonjo-Iweala, to speed up negotiations over patents for vaccines and therapeutics needed to address public health emergencies.
As part of a plan for a 'grand bargain' on energy and food security, Vera Songwe, executive-secretary of the UN Economic Commission for Africa, called for a new issuance of Special Drawing Rights (SDRs) by the International Monetary Fund that will allow Africa to raise its share of the global pool of SDRs from $33.6bn to $67bn.
Songwe has also called for a programme to increase the African fertiliser production supply chain, building on existing capacity in Morocco, Egypt, Angola and Nigeria but also Togo, Senegal and Ethiopia. Increased fertiliser production will help lower prices and increase productivity.
G7 leaders discussed ways to break Moscow's stranglehold on much of eastern Europe's grain exports. German Agriculture Minister Cem Özdemir led discussions on ways in which Ukrainian grain could be exported via other routes to circumvent Moscow's blockade in the Black Sea.
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