Opening Remarks at the 60th Anniversary of IMF African Department

IMF News, December 15, 2021

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Purpose:
- Celebrate the 60th Anniversary of the establishment of the African Department at the IMF.
- Discuss two issues: (1) how Africa, the IMF, and the African Department have evolved over the past 60 years; and (2) what challenges the region, the institution, and the African Department will face in the post-pandemic world.
Context:
- The conference follows a commemorative event with President Ouattara in May 2021 and is accompanied by the issuance of a special Finance and Development online publication.
Event format:
- Two roundtables: “The IMF and Africa: Sixty Years of Africa’s Development” (moderated by Abe Selassie) and “Perspectives on the Future of Africa in a Post-Pandemic World” (moderated by Bo Li).

Institutional milestones:
- IMF early membership: only three African member countries out of the forty original members of the IMF in 1944.
- First exceptional loans to Ethiopia in 1948-49.
- African Department created on April 10, 1961 with mandates to assist in formulation and execution of IMF policies, advise African members on economic policies, and inform Management and the Executive Board about regional developments and policies.
- Mandate expanded to allow consultations with official and private creditors on financing of economic programs and the rescheduling of external debt.
Programmatic developments:
- Creation of the Poverty Reduction and Growth Facility (PRGF) in 1999 as a landmark for concessional lending to the region.
- HIPC debt relief initiative and the Multilateral Debt Relief Initiative (MDRI) in the 2000s.
- Reform of IMF’s framework for Low-Income Countries via the Poverty Reduction and Growth Trust fund (PRGT) in the 2010s.

1940s–1960s:
- Post-War and decolonization processes; extreme poverty and lack of basic health care and education in many countries.
1970s:
- Collapse of the Bretton Woods system and two oil price shocks necessitated difficult adjustments.
1980s:
- Debt crises and inflationary spikes across emerging and developing countries, affecting Africa.
1990s:
- External and capital flow crises, including the devaluation of the CFA Franc in West and Central Africa.
2000s–2010s:
- “Take-off” period: political improvements, anti-corruption efforts, improved governance, macroeconomic growth plans.
- Favorable external environment (high commodity prices), HIPC and MDRI debt relief helped reduce debt levels and support macroeconomic stability.
- Several countries achieved dramatic improvements in economic growth, poverty reduction, life expectancy, educational attainments, and political accountability.

Lessons and policy orientation:
- Learned from past mistakes: greater attention to program ownership and streamlined conditionality.
- Increased focus on making growth more inclusive, with attention to inequality, gender, and climate change.
Operational presence:
- Resident representatives, five regional technical assistance centers, and an active African Training Institute to strengthen field presence.
- Enhanced interaction with authorities, civil society, and local stakeholders to better understand needs and provide support.
Current scale:
- IMF membership now includes all 53 African countries.
- Assistance to Africa has become a major part of the Fund’s role and budget.

IMF responses to the pandemic:
- Enhanced financial support and toolkit.
- Quickly expanded concessional financing for LICs with hands-on and targeted technical assistance.
- Extended debt relief to the most vulnerable members.
- Provided a financial boost with the SDR allocation to better support recovery of LICs from the pandemic.
Urgent public-health and economic priority:
- Vaccination policy is described as the most important economic policy worldwide, especially in Africa.
- Current vaccination statistic cited: “with only about 4.5 percent of sub-Saharan Africa’s population vaccinated.”
Policy prescriptions and international actions requested:
- Ensure equitable and affordable access to vaccines for the region.
- International community to ramp up vaccine distribution and deployment.
- Establish a fair mechanism to redistribute vaccines from surplus to deficit countries.
- Create a fully funded system to accelerate vaccination in poorer countries.

Development outlook:
- Achieving the Sustainable Development Goals or SDGs has become more elusive with COVID-19.
- Expressed optimism: the region can adapt, alleviate the impact of COVID-19 and come out on a path to a more inclusive, greener, and smarter recovery.
Closing remarks:
- Welcome to panelists, guests, and moderators.
- Handover to the African Department Director to begin the program.

Antoinette M. Sayeh — Opening Remarks at the 60th Anniversary of IMF African Department, December 15, 2021.