Can EU-AU Summit €150 billion package help Africa’s post covid-19 recovery?


The South African delegation has returned from Brussels, Belgium, where it attended a two-day summit of African and European heads of state and governments, which concluded on 18 February.


The delegation, which was led by President Cyril Ramaphosa, and its African partners have not come back from the 6th  EU-AU summit empty-handed despite not getting everything they intended to attain as the continent strives to bounce back from covid-19 related economic devastation.


Ahead of the Summit, there was much talk about transforming the relationship between the African Union (AU) member states and the European Union (EU) to make it more equitable and less one-sided in favour of the EU. Since the end of colonialism in Africa several decades ago, many African nations have been engaging Western countries to assist them to industrialise and diversify their economies away from reliance on extracting and exporting minerals.


Did the Summit live up to its billing of reconfiguring the relationship between the two continents from a donor-recipient engagement into a partnership of equals, in which African countries are treated as reliable development partners rather than beggars of donor funding?


From a South African perspective, the answer to this question will largely depend on the fulfilment of commitments contained in the Joint Vision for 2030 document that was released at the conclusion of the Summit.


The six-page document pledges a financial package of €150 billion for investment in Africa over the next seven years mainly in health, green energy, education, digital connectivity, and infrastructure to bolster economic integration under the auspices of African Continental Free Trade Area (AfCFTA). The Joint Vision also seeks to strengthen co-operation between the two continents to maintain peace and security, promote good governance, advance protection of human rights, and promote gender equality.


Geopolitics experts have described EU’s package as an attempt to counter the $40 billion investment package promised by China during the 8th China-Africa Summit held in November 2021 in Dakar, Senegal.


The €150 billion will be drawn from the EU’s €300 billion Global Gateway Fund launched in December last year to take on China’s Belt and Road Initiative (B&R), whereby the Chinese estimate to invest more than $800 billion in infrastructure to connect China’s economy to 165 countries.


With regards to health, the EU has promised to supply 450 million covid-19 vaccine doses to Africa by mid-2022. At the China-Africa Summit, the Chinese package promised to deliver 1 billion doses, of which 400 million of the jabs would be produced by Chinese companies on the continent in partnership with African countries.


While the EU’s vaccine gesture has been welcomed by AU leaders, it has disappointingly come short on what African countries had asked for. President Ramaphosa had pleaded with EU leaders for a waiver of intellectual property (IP) rights on covid-19 vaccines covered by the World Trade Organisation’s TRIPS Agreement to enable Africa to produce vaccines on its own and achieve vaccine sovereignty. However, the EU nations have been vehemently opposed to this proposal on the grounds that they are protecting IP rights of the vaccine patent holders. In the eyes of African leaders, the EU’s refusal has created an impression that profits trump lives.


Be it as it may, the World Health Organisation (WHO) announced in Brussels that six African countries, namely Kenya, Egypt, South Africa, Nigeria, Senegal, and Tunisia have been selected to receive the technology needed to produce mRNA vaccines on the continent.


This technology transfer deal will see South Africa serve as a Hub for this project, whereby it will provide training to selected manufacturers in partner African low and middle-income countries.


This project will go a long way towards boosting vaccine manufacturing in Africa, although it excludes the IP waiver proposal that African leaders had pushed for. Only 1% of covid-19 vaccines distributed in Africa are currently produced on the continent and to speed up vaccinating its population against the deadly virus, Africa must participate in vaccine production.


The continent has set itself a target of providing jabs to 60% of its 1.3 billion population. So far, it has reached only 11% of its population due to insufficient supply of vaccines.


Another area where African countries required co-operation with the EU is energy. The continent needs funding to tackle lack of access to electricity for more than 600 million Africans, but African leaders walked away from the summit without a commitment from the EU that it will continue financing gas, oil, and coal projects, of which the continent is dependent on as energy sources to power its industrialisation.


The EU has indicated that it has appetite for funding renewable energy such as wind and solar power, raising doubts about whether or not it will continue supporting hydrocarbons and gas-based energy projects going forward. This is despite African countries having expressed their commitment to mitigate climate change and maintaining global aggregate temperature rise below 1.5 degrees.


African countries, which are some of the world’s lowest emitters of greenhouse gases, have been calling for a fair and equitable global energy transition that is not going to leave poor countries with stranded assets in energy-related sectors like coal mining, an outcome that could result in massive job losses and mushrooming of ghost towns.


South Africa is an advocate of a fair energy transition that considers developmental needs of poor countries. While coal currently accounts for 90% of South Africa’s energy sources, it has been ramping up roll out of wind and solar energy farms to reduce its reliance on coal-fired power stations for generating electricity. Last year, South Africa announced that it had secured $8.5 billion in financing from EU, Britain, Germany, France and United States over the next five years to help it shift from coal to renewable energy. Furthermore, South Africa is investing heavily in new energy generation to boost supply to meet demand and support economic growth.


The next summit will be held three years from now and hopefully by then much of the Joint Vision objectives would have been implemented, in line with the broader and long-term goal of achieving shared prosperity between Africa and Europe.