Managing Director's Remarks at the Global Center on Adaptation's Africa Adaptation Summit

IMF News, September 5, 2022

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"We are now experiencing a cost-of-living crisis."
A war in Europe — "Russia’s invasion of Ukraine" — "has had an impact, fast and far."
"The climate crisis has hit hard in many places this year."
Two lessons drawn from the context:
- "We are living in a more shock-prone world, and we must be mindful that unexpected events can disrupt our plans."
- "Global cooperation is fragile and that the risk of fragmentation is serious."
Social and economic consequences:
- "People are tired of the pandemic, and now they are being hit with inflation."
- "In many countries, fiscal space is gone, and the debt situation for 25 percent of emerging markets is no longer sustainable."
- "Among poorer countries, over 60 percent are in or at risk of debt distress."

Argument: "We can no longer think of our economies as relatively simple mechanisms which function so long as there is a strong banking sector and financial stability."
Resilience must be comprehensive and include:
- Resilient people: "educated, ... healthy, and have the security of some social protection."
- Resilient economies and societies: "people feel that they belong, that there is fairness, that there are jobs for them."
- "A resilient planet."
Specific emphasis for Africa:
- "When it comes down to the climate crisis, we all know Africa has contributed the least to it, but suffers the most from its consequences."
- Endorsement of African leadership: "I salute the African leaders gathered here today for their commitment to advancing climate adaptation."
- Endorsement of the African Adaptation Acceleration Plan and commitment to alignment.

Core IMF task: "macroeconomic and financial stability, growth, and employment."
Claim: "We can no longer deliver on this mission unless we embrace this comprehensive concept of resilience."
Integration of climate into IMF work:
- "We integrate climate in our policy analysis, policy recommendations, and in our financial sector assessments."
- "We integrate it in our public investment management assessments."
Financing instrument:
- The Resilience and Sustainability Trust "is now $40 billion-strong."
- Instrument features: "long maturity—20 years—and a long grace period—10.5 years."
- Ambition: "My dream is for the $40 billion to generate $400 billion in financing for adaptation and mitigation in our member countries."
- Use-case focus:
- In high emitters: "the focus is mitigation."
- In climate-vulnerable countries: "the focus is on adaptation."
- Status: "I’m proud that we have many countries from Africa who are thinking of tapping into this instrument."
- Implementation note: "We hope to advance quickly with several of these African countries."

Protect social spending: "we must look at social protection and social spending in our member countries and make sure it is protected."
Ensure resilient investment decisions: "we must look at investment decisions and be confident they are resilient."
Cooperate with others: "Cooperating with others is a ‘must’ if we are to succeed."
Framing: Environmental action as an opportunity — "If we do it right, it can be a source of new economic opportunities, create jobs, and improve living standards."

"25 percent of emerging markets" — debt situation "is no longer sustainable."
"Over 60 percent" of poorer countries are "in or at risk of debt distress."
Resilience and Sustainability Trust size: "$40 billion."
Resilience and Sustainability Trust maturity: "20 years."
Resilience and Sustainability Trust grace period: "10.5 years."
Financing ambition: "$40 billion" to generate "$400 billion."
Country examples cited: Sri Lanka; Ghana ("a country with strong fundamentals like Ghana in a situation where it is harder to access markets because of exogenous shocks").

Managing Director's Remarks at the Global Center on Adaptation's Africa Adaptation Summit — September 5, 2022