Pledging Conference Mobilizes US$130 Million for Four IMF African Regional Technical Assistance CentersPress Release No. 09/454
December 11, 2009
The International Monetary Fund (IMF) concluded today a successful pledging session, co-hosted by the African Development Bank (AfDB), with donors pledging to four of the IMF’s five African Regional Technical Assistance Centers (AFRITACs). Together with contributions from recipient countries and the IMF, this will provide financing of US$130 million to two existing and two new AFRITACs.
“We have received very substantial pledges of financial support for our AFRITACs today,” said Mr. Murilo Portugal, IMF Deputy Managing Director. “We are happy to see this confluence of support by donors and beneficiary countries alike, coming together within a short period of time. I would like to thank all those who have committed to contribute to this important initiative to the benefit of Sub-Saharan African countries.
“The AFRITACs assist countries in designing and implementing sound macroeconomic policy, which is key to their development and all the more important in light of the financial crisis. They provide a platform for donor coordination as called for in the Paris Declaration on Aid Effectiveness (http://www.oecd.org/dataoecd/11/41/34428351.pdf),” Mr. Portugal said.
Mr. Donald Kaberuka, President of the African Development Bank Group, said “The African Development Bank has been a key supporter and partner of the AFRITAC Initiative. The global economic and financial crisis, continued vulnerabilities of African countries, make the policy advice and technical assistance provided through AFRITACs even more relevant today. The areas in which AFRITACs are providing assistance are critical to rationalizing public finances and reducing poverty, including debt and revenue management and tax reform. The Bank is pleased to continue its support to AFRITACs because of the strong track record, results oriented delivery and demand driven services.”
Participants in the pledging session included representatives of Brazil, China, the European Commission, the European Investment Bank, France, Germany, Italy, Luxembourg, the Netherlands, Spain, Switzerland, and the United Kingdom; representatives of regional organizations, including ECOWAS, IOC, SADC, and WAEMU; and ministers and senior officials of the recipient countries: Cameroon, Ghana, Malawi, Mali, Mauritius and Tanzania.
The AFRITACs are widely considered as models for effective capacity building in Africa. They assist recipient countries in their efforts to strengthen financial governance and build effective institutions. They also support regional integration, working with regional organizations in support of their objectives and providing a platform for donor coordination. In 2008, the African Governors of the IMF formally requested the Fund to expand technical assistance delivery through the AFRITACs. Since then, the need to assist countries in dealing with the impact of the current economic and financial crisis has further exacerbated the need for technical assistance. The IMF intends to respond to the emerging needs of its member countries and expand technical assistance delivery through AFRITACs. When full financing is secured, in addition to scaling up the operations of two existing centers for Eastern and Western Africa (and, at a later stage, a third center covering Central Africa which is on a different funding cycle), two new centers would be established for Southern Africa in Mauritius and for non-francophone West Africa in Ghana so that all sub-Saharan countries will be covered. This would complete the ambitious Africa Capacity Building Initiative that the IMF embarked on in 2002 to assist countries in strengthening economic governance and domestic capacity of governments to carry out sound policies for economic growth and poverty reduction.
Donors and recipient countries are supporting the Fund’s efforts in expanding the successful AFRITAC model to cover all Sub-Saharan African countries. The two existing and two new centers will require funding of about US$200 million over five years. Funding will be provided by recipient countries, host countries, and the IMF; and firm pledges were received from the United Kingdom, Switzerland, France, the AfDB, the Netherlands, Germany, the European Investment Bank, Finland, Kuwait, Luxembourg, Italy and Brazil.
In addition, several African Regional Organizations as well as the Africa-Caribbean-Pacific Group of Countries in conjunction with the European Commission have expressed their support to the Initiative and are exploring the possibility of substantial contributions. Discussions are also ongoing with other bilateral donors. “I am confident that we can close the remaining gap in the months ahead so that we will be able to fully respond to African countries’ urgent needs for capacity building,” Mr. Portugal said.
Demand for the IMF’s technical assistance is rising in light of the current global economic and financial crisis as countries work on strengthening their institutions. To meet this rising demand as well as to better coordinate assistance delivery, the Fund is strengthening its partnerships with donors by engaging with them on a broader, longer-term, and more strategic basis. As a part of these efforts, the IMF recently opened the Central America, Panama, and the Dominican Republic Regional Technical Assistance Center (see Press Release No. 09/236) and intends to open three additional Regional Technical Assistance Centers (RTACs) in Central Asia, and Southern and Western Africa.
Complementing the regional perspective of the RTACs, a menu of Topical Trust Funds (TTFs) will provide a global coverage and a specialized topical scope. The IMF launched its first TTF on Anti-Money Laundering and Combating the Financing of Terrorism in May 2009 (see Press Release No. 09/108). The roll-out of other TTFs is planned over the next year in the areas of natural resource management, tax policy and administration, public financial management, development of sustainable debt strategies, compilation of statistics relevant to financial stability, and macroeconomic training for officials from African countries.