The managing director of the International Monetary Fund (IMF) Kristalina Georgieva on Wednesday asserted that the coronavirus economic turmoil “has been hurting Africa particularly hard,” and the continent would need about $245 billion in financing until 2025 to recover.
“We know that what has happened hurts everybody everywhere, but it has been hurting Africa particularly hard. Why? Because Africa still finds itself holding the short end of the stick on vaccinations,” she said from Washington D.C. during a press briefing on the global policy agenda. “You know it. We are only at 4 percent in Africa. We are at 60 percent in advanced economies. And Africa finds itself in a very tough place with limited fiscal space and increased debt levels in so many countries. And then on top of it, we have insecurity and conflicts in so many parts.”
Georgieva said while some countries in Africa are doing really well with strong growth and recovery, “by and large, as your question indicated, we see a difficult time for Africa.”
She said, “We estimated the contraction in Africa to be 1.7 percent in 2020, worst reading on record, and growth is recovering to 3.7 percent this year and next year. But for Africa to catch up, it has to grow at 6, 7, 8, 9, 10 percent, not at 3.7. So for that reason, we have been ringing the bell that we have to mobilize financing to help Africa go over the impact of COVID‑19. You quoted the exact number we came up with, $245 billion needed until 2025.
“If we are to see Africa catching up on the Sustainable Development Goals, we have to double this number. So what is the Fund doing? We are tackling three problems. One, debt. As you know, the three cases, countries asking for Common Framework are all from Africa. Chad, Ethiopia, Zambia. We want to make them work so more countries step forward for debt restructuring. And we are working with African countries on debt transparency because, if you are transparent about your debt, it is more likely it will be restructured, including with private sector participation.
“Two, we are working hard to expand our own contribution to financing in Africa. We reformed the Poverty Reduction and Growth Trust so it can provide more concessional financing. We increased the access levels by 45 percent. And we are now seeing a great deal of interest to contribute on‑lending of SDRs voluntarily to the Poverty Reduction and Growth Trust so we can do more for Africa.
“Three, we are working with African countries on their structural reforms. With some we have programs. With others we only have—we have capacity development, technical assistance because, what is the big lesson of this pandemic? Countries that stepped into the crisis with strong fundamentals are coping much better than those that stepped in the crisis with weak immune systems. And that building the immune system of the African institutions is a central part of our work. Our commitment to Africa is strong.”