European Union Commits EUR 14.6 million to Support IMF Capacity Building in Southern and Eastern Africa

Press Release No. 11/365
October 17, 2011

The International Monetary Fund (IMF) and the European Union (EU) today expanded their partnership in support of IMF capacity building in Africa through the exchange of two Contribution Agreements totaling EUR 14.6 million (about US$20 million). The agreements, signed recently, will support the IMF’s Africa Regional Technical Assistance Centers for Eastern (AFRITAC East) and Southern Africa and the Indian Ocean region (AFRITAC South).

The IMF’s AFRITACs are widely considered models for effective capacity building in Africa. They assist recipient countries in their efforts to strengthen financial governance and build effective institutions. AFRITACs provide assistance critical to strengthening the public finances and reducing poverty, including debt and revenue management, and tax reform. They also support regional integration and provide a platform for donor coordination.

“We are delighted to expand our close partnership with the EU in support of our member countries in Eastern and Southern Africa, and are very grateful for its generous support for these two regional centers,” Deputy Managing Director Min Zhu said at the ceremony marking the exchange of the agreements in Mauritius, where AFRITAC South officially opened today. “We are expanding the AFRITAC network in response to a request by our African members, as the centers’ capacity building work is highly appreciated by beneficiary countries. Through its contribution, the EU is helping to build a success story here in Africa, as we have done already through our successful partnerships with the EU in our centers in the Middle East, Central America, Caribbean, and the Pacific,” Zhu added. “The AFRITACs are excellent vehicles for advancing regional integration and harmonization objectives, and we look forward to working closely with all relevant parties to support better integration among countries and with the global economy.”

The funding comes from the EU’s 10th European Development Fund (EDF) Regional Indicative Program for the Eastern and Southern Africa and Indian Ocean (ESA-IO) region. The program aims to support the integration agendas of regional organizations, strengthen regional cooperation, and support the region’s integration into the global economy. The project will assist countries as they institute reforms to improve tax administration and public finance management, standardize customs processes and procedures, reinforce the soundness of monetary frameworks and financial sectors, improve banking supervision, and strengthen data provision, thus facilitating private sector development to boost investment and growth and reduce poverty. The Indian Ocean Commission, with the assistance of the Interregional Coordination Committee, will assume a coordination role to ensure that technical assistance and training delivered through the centers are in line with the regional integration agenda.

"The EU support aims at contributing to the regional economic integration process of the ESA-IO region,” said Alessandro Mariani, Ambassador of the European Union in Mauritius. “The EU has experienced itself the benefits of regional integration and believes it is a key mechanism to foster growth and poverty reduction. We are pleased to enter into this partnership with the IMF that will contribute to create a macro-economic environment conducive to trade, investment and policy harmonization amongst the countries of the region."

Background Information

Demand for IMF technical assistance has risen in light of the global economic and financial crisis, but also because countries are seeking to strengthen their institutions. At the same time, the Fund is moving forward with a broad range of measures to respond more effectively to its members’ needs to deal with the emerging challenges of the global economy. To meet this rising demand as well as better coordinate assistance delivery, the IMF seeks to strengthen its partnerships with donors by engaging them on a broader, longer-term, and more strategic basis. As a part of these efforts, the IMF is expanding its network of Regional Technical Assistance Centers. It now has four centers in Africa, plus centers in the Pacific, Middle East, Central America and the Caribbean.

The Africa Regional Technical Assistance Centers (AFRITACs) are part of the IMF’s Africa Capacity-Building Initiative launched in May 2002. Responding to calls from African leaders, the Initiative promotes strengthening the capacity of African countries to design and implement their poverty-reducing strategies, as well as to improve the coordination of capacity-building technical assistance in this endeavor. As part of the Initiative, four centers have been established in Africa. AFRITAC East was opened in Dar Es Salaam, Tanzania, in 2002, and serves seven countries in East Africa. AFRITAC West was opened in Bamako, Mali, in 2003, and serves 10 countries in Francophone West Africa. AFRITAC Central was opened in Libreville, Gabon, in 2007, and serves nine countries in Central Africa. AFRITAC South started operations in June 2011 in Mauritius and covers 13 countries in Southern Africa and the Indian Ocean. Work is in progress to open a regional center in Ghana to cover non-Francophone countries in West Africa (AFRITAC West 2). This will complete coverage of all sub-Saharan countries through AFRITACs.

Complementing the regional perspective of the regional centers, topical trust funds provide technical assistance globally on specialized topics. A successful topical trust fund on Anti-Money Laundering/Combating the Financing of Terrorism was launched in May 2009 (see Press Release 09/108). New topical trust funds on Managing Natural Resource Wealth (Press Release No. 10/497), and on Tax Policy and Administration (Press Release No. 11/133) were launched in May 2011. Responding to the recent crisis, further topical trust funds are envisaged, including on sustainable debt strategies and managing debt portfolio risks.



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