Opening Remarks at Mobilizing with Africa II High-Level Virtual Event

IMF News, October 9, 2020

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Opening Remarks at Mobilizing with Africa II High-Level Virtual Event

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Bibliographic details

• Authors: Managing Director Kristalina Georgieva October
• Published: October 9, 2020

Crisis overview

• COVID-19 continues its assault on health and the economy in Africa.
• Key figures reported:
  • "more than a million cases."
  • "23,000 deaths confirmed; countless others unconfirmed."
  • "family incomes down 12 percent."
  • "up to 43 million more people are at risk of extreme poverty."

Progress made since the first Mobilizing with Africa meeting

• African policymakers acted swiftly under tight fiscal constraints.
  • On average, they spent an additional "2.5 percent of GDP" on health and social programs.
• International financial institutions provided fast-track support.
  • The IMF provided "around $26 billion."
  • This amount is "ten times more than our average annual lending in the previous decade."
• Recent IMF operational steps:
  • "IMF Executive Board approved a six-month extension of higher access limits under our Rapid Credit Facility and Rapid Financing Instrument."
  • "six-month extension of debt relief for our poorest members under the Catastrophe Containment and Relief Trust."
• Governance examples in recipient countries:
  • "Burkina Faso, the Gambia, and the Central African Republic have put in place admirable governance mechanisms to ensure the funds benefit their people as intended."

The financing challenge

• Africa faces substantial financing needs to build recovery:
  • "financing needs of $1.2 trillion through 2023."
  • Current commitments from international financial institutions and official bilateral creditors are expected to fill "less than a quarter of this need."
  • With private capital subdued, there is a "projected gap of over $345 billion through 2023"—with "nearly half this burden" in Africa’s low-income countries.
• Debt pressures:
  • Some countries confront "high debt burdens forcing them to choose between debt service and additional social and health spending."

Meeting the financing challenge — IMF commitments and policy actions

• Increase concessional lending capacity:
  • Work with membership to "further increase concessional lending capacity."
  • Progress in "replenishing the Poverty Reduction and Growth Trust."
  • Engage members to "temporarily lend us some of their SDRs to step up concessional lending."
  • Call for "new grant pledges to make it possible to increase concessional financing for low-income countries."
• Support for countries with unsustainable debt:
  • "Support the extension of the G20’s Debt Service Suspension Initiative."
  • "Pursue restructuring on a case-by-case basis when necessary."
  • Seek to "mobilize the grant pledges needed for a third tranche" by increasing the Catastrophe Containment and Relief Trust.
• Prioritize support for policy makers:
  • Use "financial programs, surveillance, and capacity development programs."
  • Encourage reforms and structural transformation underpinned by "strong policies and institutions."
  • Areas for improved public spending and reform:
  • "health"
  • "education"
  • "social protection"
  • "digitalization"
  • "infrastructure"
  • Support strategies to:
  • "strengthen public financial management"
  • "ensure financial stability and inclusion"
  • "boost trade"
  • "eliminate barriers to private investments"
  • "enhance growth and generate jobs for their youthful populations"
• Coordination:
  • "In all our activities we will work hand in hand with national authorities, regional institutions, and bilateral and multilateral partners."

Overarching message

• The pandemic is a global, border-transcending crisis: "The pandemic does not respect national boundaries—we’re all climbing a mountain through a storm together, connected on one rope."
• Mobilizing with Africa is presented as imperative: "mobilizing with each other, mobilizing with Africa is not just the best choice. It is the one and only choice."

Opening Remarks at Mobilizing with Africa II High-Level Virtual Event — By Managing Director Kristalina Georgieva, October 9, 2020.

Content in this bundle

• Microsoft Word - Background Note for Mobilizing with Africa II
  • Microsoft Word - Background Note for Mobilizing with Africa II (Markdown version)
  • Microsoft Word - Background Note for Mobilizing with Africa II (PDF)
• Background Note for Mobilizing with Africa
  • Background Note for Mobilizing with Africa (Markdown version)
  • Background Note for Mobilizing with Africa (PDF)

References

• https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva
• Central African Republic and the IMF
• Speeches
• PRESS CENTER
• https://www.imf.org/en/home