Africa should grow by 8 not 3% – IMF Boss

Business

Africa has been very severely hit by the health crisis but even more so by the economic consequences. Last year Sub‑Saharan Africa shrinking by 2 percent, the first recession in decades since the 1960s; and on top of it, the recovery in Africa falls short of the global recovery.

“We project 6 percent for the world for 2021 but only 3.4 percent for Africa. Africa should grow 8 percent, not 3” said International Monetary Fund (IMF) Managing Director Kristalina Georgieva in her opening Press Conference, at the 2021 Spring Meetings.

This she said is where their concern is; that Sub‑Saharan Africa stepped into this crisis with limited fiscal space. “It has been prudently approaching prioritizing health expenditures, but very clearly investments have shrunk, and in many countries in Sub‑Saharan Africa, debt levels are high.”

Georgieva added that, it is the reason for the IMF to concentrate a lot of our engagements on Sub‑Saharan Africa. She mentioned that they have increased last year 13 times the financing, especially on emergency basis, to Africa and that they have advocated for debt service suspension, and that has provided up to now some $7 billion to low‑income countries.

A big chunk of this is for Sub‑Saharan Africa. The IMF she said also provided debt relief to their most vulnerable members, so Sub‑Saharan African countries that fall in this category benefited from it.

“We are looking forward, and we asked our Board of Directors to allow us to have higher access levels going forward, because 2021, the crisis is not over. We are looking for ways to reform our concessional lending program, the Poverty Reduction and Growth Trust, so we can do more concessional financing on a larger scale for longer, especially in Sub‑Saharan Africa.”

Last but not least, with the big support from the G‑20, they will take it to their Board and Georgieva says she is very optimistic that they will get a new SDR allocation; and, of course, Sub‑Saharan African countries with depleted buffers, – that would be a very welcome injection for them,.

“We are calling on our wealthier members who may not need an injection of reserves to lend through us on highly concessional terms funding that can go to countries that need it, and I have no doubt that we would have success in supporting the countries in Africa” she said.

She concluded by saying what she thinks it is very important, “In my engagement with the Ministers of Finance in Sub‑Saharan Africa, I made it very clear that there is a lot that needs to be done domestically to increase tax revenues, to improve the quality of spending, and that the Fund is there to support countries to do so and to support them in improving governance, transparency, and accountability to their citizens.”

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