By Will Dickson
As many developed countries begin their transition out of the pandemic, developing nations must contend with ongoing socioeconomic backsliding as a result of the global health crisis. Yet, despite an overall reduction in the global economic resources available for foreign investment in 2020, positive indicators for foreign aid do persist. The French Development Agency (AFD), a public development financial institution, is one such example. The agency last year not only increased its disbursements by 35% but registered €12.1 billion in new commitments and achieved a positive net income. While investment in the medical sector is a given, AFD Group is maintaining a long-term strategy in 2021 with a multifaceted commitment to equality and sustainability with their World in Common initiative.
In April 2020, France announced the €1.2 billion “COVID-19 — Health in Common” initiative, a partnership-based effort to bolster local health systems and deliver treatment to countries in dire need in Africa, the Americas, and the Middle East. However, AFD has made a point of maintaining its long-term focus in other sectors, especially in Africa, to prevent the pandemic from reversing years of economic, social, and environmental progress.
To this end, AFD convened the Finance in Common Summit (FiCS), the first meeting of the world’s 450 Public Development Banks, the aim of which was not only to secure funding for COVID relief. The greater goal was to establish a roadmap for a global post-COVID recovery that focuses on equitable and environmentally sustainable growth. FiCS is considered to have been an essential lead-up to this November’s highly anticipated UN Climate Change Conference (COP26).
In an effort to both stimulate growth and meet the SDGs, AFD has carried on with its 2018-2022 “World in Common” strategy. The first two commitments outlined in this strategy are the “100% Paris Agreement” and the “100% social link”. The commitment to the Paris Agreement means that the Agency “will draw on public and private resources to fund capital investments that protect the Earth from climate change and biodiversity loss: all project funding will finance resilient low-carbon development in keeping with the Paris Agreement.” Meanwhile, the social commitment promises to reinforce cohesion between populations through “reducing inequalities — particularly gender inequality — and increasing access to education.” In order to reinforce these commitments, France has pledged to increase its Official Development Assistance (ODA) to 0.55% of gross national income by 2022 up from 0.44% in 2019 and 0.53% in 2020.
One such example of these commitments in action is AFD’s “Innovating for Climate and Biodiversity” Digital Challenge. The challenge is designed to be accessible to small-scale start-ups and contrasts significantly with investments in large-scale infrastructure projects with major institutions, projects that have proven to be tricky investments during pandemic times. For this challenge, African start-ups are encouraged to submit projects that either promote sustainable economic activity or propose innovative solutions to combat climate change and preserve biodiversity on the continent. Submissions are open until the 26th of May and the 10 best projects will receive support and financing worth €20,000. At the same time, AFD has announced an open call for any research organization or NGO for research relating to the “integration of biodiversity in economic sectors.”
France is ranked as the fifth-largest donor nation, positioned second among donors in the educational sector, and leads all other nations in the environmental sector. Fifty percent of France’s foreign aid goes to countries in northern and central Africa with substantial funding also allocated to the Middle East and South America. According to the Development Assistance Committee (DAC), France relies on loans to distribute aid twice as much as other nations do. DAC has recommended that France substitutes some loan activity with awarding grants. The country has been steadily increasing its foreign aid budget since 2017.
