Tinubu pushes for FDI as world leaders seek inclusive financial system at Paris summit
• Macron to advance reform of global financial architecture
• Tinubu to meet U.S., French, Swiss leaders at summit
• Climate activists protest, demand end to financing of fossil fuels
As the Paris Summit for a ‘New Global Financial Pact’ begins today, world leaders meet to deliberate on impact of the global crises of the last five years – COVID-19, Russia’s war on Ukraine, inflation, climate change – that have plunged many of the developing world into economic decline alongside crippling debt and exacerbating energy and food insecurity.
To address these problems, France President, Emmanuel Macron is holding a summit that seeks to focus political attention on the injustices and inequities of the current global financial architecture, bringing together leaders, civil society advocates, private actors, and international financial institutions.
The gathering’s goal is to find ways to build a more inclusive and equitable financial system, one that enables climate transition and promotes biodiversity without jeopardising development.
To tackle the impact of COVID-19 on Africa, in May 2021, France hosted the summit on the financing of African economies. This time, the goal is to reinvent the global financial architecture. Ever since the paradigm shift brought about by the pandemic, Macron has argued for a new approach – a ‘Paris consensus’, in reference to the 2015 Paris Agreement on climate change – to replace the market-orientated Washington consensus with net zero, sustainable economic development goals. With the summit, Macron is pushing to reform the global architecture to incentivise net zero investments for a sustainable future.
According to the European Council on Foreign Relations (ECFR), Macron’s idea behind this summit is to give a political boost to an issue all too often discussed only on a technical level, and in silos.
Head, ECFR Policy Fellow, Celia Belin, said: “No one expects an actual pact to be signed, but France – along with the summit’s steering committee, which is composed of states and international organisations – is aiming for a political declaration that would muster firm commitments from world leaders, and force consequences down the line.”
Already, world leaders have arrived for the summit, among whom are the United Nations (UN) Secretary-General, António Guterre; the new president of the World Bank, Ajay Banga; president of the European Commission, Ursula von der Leyen; the American Treasury Secretary, Janet Yellen; president of Brazil, Luiz Inácio Lula da Silva; the German chancellor, Olaf Scholz; and the Chinese prime minister, Xi Jinping, along with 40 heads of state, one-third of whom are from Africa.
President of the International Fund for Agricultural Development (IFAD), Alvaro Lario, said he will be making a strong pitch for increased investment in small-scale farmers and rural communities at the summit.
He wrote on Twitter: “My call for greater investment in rural people echoes the recognition of G7 leaders that we urgently need more support for sustainable and resilient agriculture and food systems in response to a worsening global food crisis. I shared IFAD’s vision for development with G20 leaders and argued that investing in rural communities is the most cost-effective way to improve global food security and support stability.”
Already, no less than four foreign leaders have requested to meet with President Bola Tinubu in Paris, where he is expected to participate in the summit. This is according to Dele Alake, Special Adviser to the President on Special Duties, Communication and Strategy, who spoke to the media on the essence of the summit yesterday.
Alake said the countries expressing interest to expand economic cooperation in bilateral meetings on the sidelines of the summit are France, America, Switzerland, and Sweden, among others, as President Tinubu works to network to attract greater foreign investment to the country.
“The President wants to network with international finance corporations, institutions, countries that are well healed that would facilitate or that could facilitate direct foreign investment into Nigeria,” Alake said.
He recalled that in the recent past, a lot of international investors exited Nigeria because of the restrictive currency policies, but owing to the recent bold moves taken by the President in the area of the economy, foreign nations and investors have indicated more interest in the affairs of Nigeria in shoring up the country’s economy.
President Tinubu, who is making his first trip out of the country as President, on Tuesday night arrived in Paris, France for the two-day summit. He was received at the airport by Ambassador Kayode Laro and other top government officials from the Nigerian Embassy and French Ministry of Foreign Affairs.
During his time in Paris, the President, according to Alake, will join world leaders to review and sign a New Global Financial Pact that places vulnerable countries on a priority list for support and investment, following the devastating impact of climate change, energy crisis, and the COVID-19 pandemic.
Alake explained: “The President wants to network with international finance corporations and countries that would facilitate foreign direct investment into Nigeria.
“Don’t forget that Mr President has taken some very bold steps in the area of economy, in the area of social engineering in the last few weeks, and particularly concerning the unification of the multiple exchange rates, which has caused a very positive multiplier effect.”
Apart from the immediate, medium and long-term positive effects of the unification policy, Alake said, “There could be a need for an injection of direct foreign exchange into the economy to shore up the value of the naira as market forces stabilise.”
He cited the lifted restrictions on spending done through domiciliary accounts, saying it will “build confidence in the foreign exchange system of Nigeria, which means people abroad can begin to bring in their money into the economy.
“Even those at home, who have hoarded their dollars for fear of restrictions and all that, will now be more encouraged to bring the dollars into the financial system,” he added.
Despite these, the presidential aide said the country still needs an injection of foreign exchange to build or complement its domestic policies.
“That is the essence of this meeting; it is a global summit and there are several heads of state of developed societies. The President’s policies in the last three weeks have encouraged these foreign nations and investors to become more interested in the affairs of Nigeria; in shoring up the economy of Nigeria.
“A lot of them are quite interested. Many of them have even indicated interest to meet with Mr. President on this trip,” Alake said.
Leaders will mobilise innovative financing for countries vulnerable to climate change, foster development in low-income countries, and encourage investment in “green” infrastructure for the energy transition in emerging and developing economies.
The President returns on Saturday.
Meanwhile, hundreds of climate activists protested in Paris on Wednesday demanding an end to the financing of fossil fuels as a summit for a new global financial pact begins in the French capital.
They are now calling for more meaningful commitments including a roadmap for what to expect from this year’s meeting of the Group of 20 major economies and the UN climate conference.
“What makes us angry, and not just on the eve of the summit, is that companies like TotalEnergies, Exxon and Shell continue to break profit records every year, even though they have known for 50 years about the impact of their activities on the climate and biodiversity,” said Soraya Fettih, the 350.org campaign manager.
The protests also attracted climate activists from Uganda who are opposing the mega oil project and its pipeline terming it an environmental hazard.
Patience Nabukalu, one of the climate activists, in a message to the French President, said: “President Macron, keep it in the ground, stop the East African Crude Oil Pipeline (EACOP), and make polluters pay if we are to have climate justice. End fossil fuel finance.”
Get the latest news delivered straight to your inbox every day of the week. Stay informed with the Guardian’s leading coverage of Nigerian and world news, business, technology and sports.