–Private sector, planned Resilience and Sustainability Trust seen helping
Africa support is rising, but it is not where it needs to be, according to a speech by IMF Managing Director Kristalina Georgieva.
“Last year we provided lending that was 13 times higher than the annual average of the previous decade,” she said, following leadership by Sweden (see link below).
See this excerpt from this speech, dated Feb. 18:
“We also moved quickly for a Special Drawing Rights (SDR) allocation. As has been acknowledged, it has helped Africa—but it has not helped enough. In some countries, it amounted to as much as 6 percent of their GDP which is not at all trivial.
But that said, US$33 billion for African countries out of a US$650 billion global allocation is clearly not where we want to be.
So, we are moving to the next frontier which is large scale on-lending of SDRs—from countries that got them but don’t need them as much, to countries that need them most.
This is the context for where we are headed.
The road ahead
We are headed towards a global target for reallocation to vulnerable countries of US$100 billion—a target set by leaders last year. At that time, for many it sounded quite unachievable. But today, we are more than halfway towards reaching this target.
We have about US$60 billion in pledges from G20 members and, of course, we are calling for more.
There are two avenues to deploy this on-lending of SDRs:
First, the tried and tested Poverty Reduction and Growth Trust. I can proudly say that the IMF is in the position to lend to countries in proportion to the quality of their reform programs. We will not ration support for African members.
But that is still not enough because we recognize that Africa, like the rest of the world, faces a complicated transition toward a low-carbon, climate-resilient economy. And Africa needs to build resilience to disasters and shocks.
So, my second ‘avenue,’ with the support of our members, we are now creating the groundbreaking Resilience and Sustainability Trust (RST). “
