Cotton bales in Geira, Sudan: African finance ministers called for more market access for developing-country products (photo: Colin Garratt/Corbis)
GLOBAL ECONOMIC CRISIS
Ministers in the 15-member African Consultative Group met at the International Monetary Fund in Washington with Managing Director Dominique Strauss-Kahn to discuss Africa’s response to the crisis and the risk that millions will be thrown back into poverty.
“The impact of the crisis on Africa will be severe,” said the co-chairs of the group, Samura Kamara, Minister of Finance and Economic Development of Sierra Leone, and Strauss-Kahn.
“Growth will be lower, budgets will be strained, and external accounts will weaken. The remarkable gains achieved by Africa over the past decade are now under threat and there is a real risk that millions will be thrown back into poverty.”
Need to implement commitments
The ministers discussed implementation of the joint commitments made in Tanzania in March, when they identified a series of actions to protect and sustain Africa’s achievements in raising growth and reducing poverty and agreed on the importance of implementing these commitments.
The IMF on April 23 announced a doubling of borrowing limits of the poorest countries under its concessional Poverty Reduction and Growth Facility and Exogenous Shocks Facility. The IMF’s Executive Board has also begun discussions on options for raising additional resources for concessional lending to allow the Fund to scale up its capacity to assist low-income countries over the medium term.
The African Governors welcomed the IMF’s decision to double access limits as well as the support by the Group of Twenty (G-20) industrialized and emerging market countries for a doubling of the IMF’s concessional lending capacity for low income countries. They stressed the need to accelerate reforms of IMF governance to amplify Africa’s voice within the institution.
IMF to support Africa
During the discussion, the Managing Director reiterated that the IMF stands ready to supplement its policy advice with financial resources and will act quickly to provide African countries with the support they need. He noted that the IMF will make financing for low income countries more flexible and responsive to the diverse needs of African countries. He also emphasized that the IMF’s framework for assessing debt sustainability is being reexamined to ensure that it can accommodate Africa’s new financing needs and opportunities.
Finance ministers (from l) Musokotwane of Zambia, Mkulo of Tanzania, Koffi Diby of Cote d’Ivoire, with IMF’s Ismaila Dieng (IMF photo)
