## Opening Remarks by IMF Managing Director Kristalina Georgieva at the High-Level Roundtable Discussion on Low-Income Countries’ Challenges and Concessional Financing

_IMF News, April 12, 2023_

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## Bibliographic details
- Published: April 12, 2023

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### Context and purpose
- As prepared for delivery.
- Event: High-Level Roundtable Discussion on Low-Income Countries’ Challenges and Concessional Financing.
- Date on page: April 12, 2023.
- Audience addressed: Ministers and Governors.

### Assessment of low-income countries’ (LICs) situation
- LICs were particularly severely impacted by multiple shocks since the pandemic.
- Per capita income growth for 2023-24 is projected to 2.8 percent.
  - Characterized as the lowest per capita growth since 1990.
  - Risk highlighted: further divergence from higher-income countries unless action is taken.
- Global context: slow growth and high inflation constrain LICs’ ability to catch up.
- Shift in financing needs:
  - Move from emergency financing toward strong demand for upper credit tranche programs to build fundamentals, growth, and employment.
- Importance of IMF roles emphasized:
  - Upper credit tranche programs to build sound fundamentals and institutions.
  - IMF programs central to debt resolution negotiations.
  - IMF role in mobilizing financing from other partners, with recognition of collaboration with the World Bank Group.
- Example of debt resolution support cited: Chad as a case where the common framework outcome was achieved.

### Financing provided and gaps
- Quadrupling of financing for PRGT-eligible countries since the start of the pandemic.
  - Total provided: $24 billion of financing since the start of the pandemic.
  - Composition: part emergency financing, primarily program financing.
- Current headwinds increasing resource needs:
  - Higher interest rates make lowering the cost of lending to LICs harder.
  - Result: the resource gap for the PRGT has grown.

### Immediate financing targets and mechanics
- Urgent first-step requests:
  - Close the subsidy gap by providing pledges of $1.6 billion.
  - Close the loan resource gap of $4.7 billion.
- Leverage effect highlighted:
  - Each $1 of subsidy mobilizes $5 of zero interest loans.
- Intended near-term outcome:
  - By October, closing these gaps can restore access to concessional financing for PRGT-eligible countries at par with access for GRA-eligible countries.
  - Emphasis on financial meaning and equality of treatment within the IMF membership.

### Medium-term strategy and next steps
- Objective: make the PRGT whole and place its longer term financing on a sustainable footing.
- Proposed approach:
  - Build consensus by the Annual Meetings in Marrakech on a phased, burden-shared strategy to replenish the PRGT so it can provide adequate support to low-income members for the longer term.
- Timeline and significance:
  - Annual Meetings in October will be hosted by Morocco.
  - Noted: first time in 50 years the Annual Meetings of the IMF and the World Bank will go to Africa.
  - Framing: opportunity to demonstrate support for the poorest members, especially African members.
- Call to action:
  - Launch the "road to Marrakesh" immediately, with preparatory inputs (two short videos and floor discussions planned at the meeting).

### Key messages and appeals
- Urgent collective action is required to prevent further divergence of LICs from higher-income countries.
- Strengthening IMF financial capacity for LICs is imperative given increased demand and higher global interest rates.
- Closing identified subsidy and loan resource gaps is a tangible, near-term target with a clear multiplier effect.
- Longer-term replenishment of the PRGT through a phased, burden-shared strategy is necessary for sustainable support.

*Opening Remarks by IMF Managing Director Kristalina Georgieva at the High-Level Roundtable Discussion on Low-Income Countries’ Challenges and Concessional Financing — April 12, 2023*

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## References

- [https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva](https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva)
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_Source: https://www.imf.org/en/news/articles/2023/04/12/sp041223-md-lics-concessional-financing_