Nigeria, Others To IMF: Adequate, Affordable Financing Critical To Reforms
Nigeria and other members of the African Consultative Group (ACG) have highlighted the importance of adequate and affordable financing to ensure that structural reform agendas produce the desired result.
They stated this at their recent meeting with the International Monetary Fund (IMF) in Washington.
A joint statement issued early on Friday, at the end of the meeting by the Minister of Finance and Coordinating Minister for the Economy, Mr Wale Edun, who is Chair of the African Caucus, and the Managing Director of the IMF, Ms Kristalina Georgieva, said the ACG called for bolstering Africa’s resilience to surmount the multi-faceted challenges facing the continent.
Specifically, the statement said: “Countries’ domestic adjustment policy efforts and structural reform agendas stand to yield better outcomes if accompanied by access to adequate and affordable financing.
“The ACG underlined the necessity for the upcoming review of Low-Income Countries (LICs) facilities to adapt to the changing global environment to continue serving vulnerable members.
“The Group also stressed the need to keep all financing options on the table and encouraged coordination with the World Bank’s 21st Replenishment of the International Development Association.”
The statement noted that although the outlook for Africa is gradually improving with growth expected to reach 3.5 per cent in 2024 and 4 per cent in 2025, growth on the continent, “is still too weak to secure improvements in standards of living and there is a growing income divergence between the continent and more advanced countries post-pandemic.”
It further noted that: “Many governments in Africa continue to grapple with financing shortages, whereas high debt service costs reduce budgetary space for priority investment and social spending and limit countries’ ability to deal with future shocks. At the same time, some countries continue to experience climate shocks such as severe droughts and floods which exacerbate food insecurity and poverty.”
According to the statement, the ACG and the IMF, “agreed to continue to work together to capture the new opportunities brought about by the climate transition and the digital transformation, especially the arrival of artificial intelligence.”
They also agreed that the IMF’s Poverty Reduction and Growth Trust (PRGT) review, “should achieve the right balance between the short-term pressures from high demand against the long-term sustainability.”
The ACG comprises the Fund Governors of a subset of 12 African countries belonging to the African Caucus (African finance ministers and central bank governors) and Fund management. Formed in 2007 to enhance the IMF’s policy dialogue with the African Caucus, the Group meets at the time of the IMF/World Bank Spring Meetings.
