The International Monetary Fund (IMF) and African Caucus have said that strengthening social protection is key to Africa\u2019s development.<\/p>\n\n\n\n
This is contained in a statement issued by the IMF Press Centre on Monday after the African Consultative Group Meeting held at the ongoing World Bank Group\/IMF 2023 Spring Meetings in Washington DC.<\/p>\n\n\n\n
The statement said Mr Olavo Correia, Cabo Verde\u2019s Finance Minister and Chair of the African Caucus and Ms Kristalina Georgieva, Managing Director, IMF, made the assertion after the meeting.<\/p>\n\n\n\n
\u201cAfrican countries are grappling with the impact of weakening global economic activity as the multiple shocks affecting the global economy persist.<\/p>\n\n\n\n
\u201cThey include the impact of the war in Ukraine that has pushed up international food and fuel prices; tighter monetary and financial conditions combined with financial sector turbulence; and increasingly severe climate-related events.<\/p>\n\n\n\n
\u201cAll of these follow the COVID-19 pandemic, which had already reduced fiscal and external buffers and caused scarring effects on many African countries.<\/p>\n\n\n\n
The executives said macroeconomic imbalances had become more prominent as exchange rate depreciation, higher global interest rates and elevated sovereign spreads made financing more expensive or even unaffordable.<\/p>\n\n\n\n
\u201cTogether with declining foreign aid budgets and lower investment flows, the region is confronted with a severe financing squeeze.<\/p>\n\n\n\n
They said the public debt-to-Gross Domestic Product ratio was now on average for the region above 60 per cent, a level last seen in the early 2000s, raising concerns about debt sustainability in many countries.<\/p>\n\n\n\n
The executives said in fact, nearly two-thirds of the region\u2019s low-income countries were at high risk or already in debt distress in 2022.<\/p>\n\n\n\n
\u201cThe group reiterated the need to address rising debt vulnerabilities and continue strengthening the international debt resolution architecture, including improving the Common Framework for debt treatments.<\/p>\n\n\n\n
\u201cThe IMF continues to explore ways to make debt resolution more efficient. To this end, the IMF, together with the World Bank and the India G20 Presidency, have launched a Global Sovereign Debt Roundtable.<\/p>\n\n\n\n
\u201cThe group also agreed that strengthening social protection is critical. Social safety nets can promote higher and more inclusive growth by improving education and health outcomes.<\/p>\n\n\n\n
\u201cAlso by enhancing human capital labour or market productivity, and encouraging vulnerable households to invest in income-generating activities that also benefit local communities<\/p>\n\n\n\n
The group also said leveraging digital infrastructure, such as mobile phone platforms, could help to increase efficiency and ensure social support was well targeted to the most vulnerable.<\/p>\n\n\n\n
They said in such a shock-prone environment, building resilience, including to climate change, remained fundamental for the region.<\/p>\n\n\n\n
\u201cIn the face of large financing gaps to meet climate adaptation needs, it is imperative to unlock concessional climate finance and attract private climate finance. Green bonds could provide a useful tool.<\/p>\n\n\n\n
The group agreed that governments in the region, the international community, and the private sector should work cooperatively to respond to the region\u2019s challenges.<\/p>\n\n\n\n
They said increasing fiscal space in a growth-friendly way would help create space for much-needed social and infrastructure expenditure.<\/p>\n\n\n\n
\u201cMobilising additional external financing to support the recovery remains critical.<\/p>\n\n\n\n
The executives said deepening domestic financial markets, strengthening regional integration, and reducing trade and cross-border barriers, would help to build resilience in the face of external shocks.<\/p>\n\n\n\n
\u201cAs well as leveraging the opportunities offered by the African Continental Free Trade Area.\u201d<\/p>\n\n\n\n
They also said improving the quality of institutions will be needed to close infrastructure gaps.<\/p>\n\n\n\n
\u201cThe IMF remains steadfastly committed to the region and continues to work towards ensuring that its concessional lending toolkit for low-income countries is flexible, effective, and well-resourced.<\/p>\n\n\n\n
\u201cThe Resilience and Sustainability Trust is now operational, providing longer-term affordable financing to address longer-term challenges, including climate change and pandemic preparedness.<\/p>\n\n\n\n
They said Rwanda was one of the first beneficiaries, with several other countries in the pipeline.<\/p>\n\n\n\n
The executive said the recently launched Food Shock Window was also providing emergency financing to countries facing urgent balance of payments needs related to the global food crisis.<\/p>\n\n\n\n
\u201cTo continue to meet the needs of low-income countries in the region, there was an urgent need to replenish the Poverty Reduction and Growth Trust and put it on a sustainable footing.<\/p>\n\n\n\n
\u201cThis is a key goal for the Annual Meetings.<\/p>\n\n\n\n
\u201cFinally, the IMF continues to provide significant capacity development to its African members to help preserve macroeconomic and financial stability and build economic resilience.\u201d<\/p>\n\n\n\n
The African Consultative Group comprises the Fund Governors of a subset of 12 African countries belonging to the African Caucus (African finance ministers and central bank governors) and Fund management.<\/p>\n\n\n\n
It was formed in 2007 to enhance the IMF\u2019s policy dialogue with the African Caucus.<\/p>\n\n\n
The International Monetary Fund (IMF) and African Caucus have said that strengthening social protection is key to Africa\u2019s development. This is contained in a statement issued by the IMF Press Centre on Monday after the African Consultative Group Meeting held at the ongoing World Bank Group\/IMF 2023 Spring Meetings in Washington DC. The statement said […]<\/p>\n","protected":false},"author":2,"featured_media":25088,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[949],"tags":[22,156],"class_list":["post-49866","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","tag-africa","tag-imf","has-post-title","has-post-date","has-post-category","has-post-tag","has-post-comment","has-post-author",""],"yoast_head":"\n