IMF—Delivering on Promises to Africa
IMF Blog, March 7, 2010
Source details
- Canonical URL
- IMF—Delivering on Promises to Africa
Other formats
Bibliographic details
- Authors: Dominique Strauss-Kahn
- Published: March 7, 2010
Context and recent performance
- The global recession struck Africa through several channels—exports collapsed, banks ran into trouble as non-performing loans grew, and investment diminished.
- Average growth in sub-Saharan Africa fell to 2 percent in 2009 from 5.6 percent the previous year.
- The IMF anticipates that Africa will see a relatively quick recovery, with average growth bouncing back to 4½ percent this year and 5½ percent in 2011.
- Pre-crisis policies allowed countries to build reserves, cut debt, and open up fiscal space to combat the recession.
IMF actions and deliverables
- Sharp jump in lending:
- The IMF signed new arrangements—or augmented existing ones—with some 20 countries.
- In 2009, the IMF committed $3.6 billion in zero-interest lending to Africa, more than three times greater than in 2008.
- Total commitments amounted to $5 billion.
- Supplementing reserves:
- IMF members approved a general allocation of Special Drawing Rights, or SDRs—an IMF international reserve asset.
- The new allocation pumped some $250 billion into the world economy, spread across our 186 members, including African members.
- Revamped lending terms:
- Moving toward less intrusive conditionality, focusing on core policy measures that are critical for stability, growth, and poverty reduction.
- Ensure lending programs have sufficient measures to protect social spending and pro-poor initiatives.
- More technical assistance:
- The IMF will add two new regional technical assistance centers in Ghana and Mauritius to supplement existing centers in Tanzania, Mali, and Gabon.
- Better representation and governance:
- The IMF is working to reform its governance so members in Africa and other countries have a larger say.
- Catalytic role on debt and infrastructure:
- Adopting a more flexible approach to looking at debt dynamics to help countries access financing for infrastructure and development goals.
- Evenhandedness and advocacy:
- Working to ensure policy advice addresses the needs of all member countries and assisting the G-20 in a process of mutual assessment of their economic policies.
- Commitments to take Africa’s concerns into account during G-20 meetings and to advocate for Africa.
Ongoing challenges and policy priorities
- Persistent vulnerabilities:
- The region remains highly vulnerable to commodity price shocks, natural disasters and, in some cases, political instability.
- Combatting climate change is a major consideration for Kenya and elsewhere in Africa.
- Policy priorities implied by the assessment:
- Maintain and strengthen fiscal space and reserves built before the crisis.
- Focus policy measures that support stability, growth, and poverty reduction while protecting social spending.
- Pursue governance reforms to improve representation and voice in international institutions.
- Expand technical assistance capacity through regional centers to support implementation.
- Apply flexible debt-assessment approaches to unlock infrastructure financing.
Engagement and forward agenda
- The Managing Director plans to discuss and listen to a broad range of African partners—from heads of state to students, from trade unionists to aid workers, and leaders of civil society—during visits to Kenya, South Africa, and Zambia.
- A follow-up report on discussions and observations was promised in a subsequent post.
IMF—Delivering on Promises to Africa — Dominique Strauss-Kahn, March 7, 2010.