The Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva on Thursday said African nations have received $36.5 billion in financial assistance since COVID-19 hit early last year, adding that more money would be needed in the coming years as the continent recovers from an economic turmoil caused by the pandemic.
“The COVID-19 pandemic caused an unprecedented recession in Africa in 2020. Poverty increased and health systems came under severe pressure. African countries implemented strong measures to contain the pandemic and mitigate its economic impact on the populations. A slow recovery is projected for 2021, with vaccine supply constraints and limited financial resources weighing on the macroeconomic outlook,” Georgieva said in a statement after meeting with African Ministers of Finance and representatives from the United Nations Economic Commission for Africa (UNECA) to discuss Africa’s response to the COVID-19 pandemic and the efforts for a sustainable, green, and inclusive recovery. “The IMF stepped up quickly to provide exceptional levels of financial assistance to the membership. Between mid-March 2020 and mid-September 2021, the IMF approved 66 requests for financial support to African countries, of which 52 requests were from low-income countries (LICs). Financial support to African countries reached an unprecedented SDR 26.2 billion (US$36.5 billion), of which low-income countries received SDR 12.8 billion (US$17.8 billion), during this period.
Georgieva noted that the IMF recently boosted its capacity to provide financial support to Africa, increasing the capacity for concessional financing under the Poverty Reduction and Growth Trust (PRGT).
In addition, in August 2021, the Board of Governors of the IMF approved the largest SDR allocation in the history of the IMF equivalent to US$650 billion (about SDR 456 billion), including about US$33 billion to Africa.
The IMF chief asserted that “transparent and accountable use of these resources in the context of medium-term policy frameworks” would be “essential to ensure an effective and sustainable response to the pandemic needs.”
She said deliberations with African finance ministers focused on the financing needs of African countries, especially low-income countries, which are expected to remain high in the next couple of years, as countries strive to overcome the impact of the pandemic, advance reforms, address climate change adaptation costs, and foster economic recovery.
“In this context, the IMF is exploring additional options to help poorer and more vulnerable countries in their recovery efforts and to facilitate more resilient and sustainable growth through potential SDR channeling. This would enable members that have strong external positions to voluntarily re-allocate part of their SDRs to help more vulnerable members,” Georgieva said. “The IMF is also enhancing partnerships with other multilateral institutions to help countries support the recovery. In our discussions today, I was greatly encouraged by African policymakers’ strong interest in working with the IMF on SDR channeling to finance longer-term reforms, including to build resilience to climate change and enhance health sector capacity.”
