The African Caucus is pushing for the alignment of more funds from International Monetary Fund’s (IMF) approved US$320 billion in Special Drawing Rights (SDR) to developing economies.
The Caucus also called for the scaling up of concessional financing for Africa needs.
The Caucus and the Fund jointly support efforts to channel more affordable financing for developing economies, including climate change adaptation and mitigation.
This follows the conclusion of the 16th General Review of Quotas (GRQ), which 50 per cent increase in quota approval by IMF members, bringing the total quotas to SDR 715.7 billion (US$960 billion).
“We encourage more work on quota realignment towards developing economies, including through a new quota formula, under the 17th GRQ,” said, Mr Wale Edun, Nigeria’s Minister of Finance and Chair of the African Caucus.
This was at the end of the African Caucus meeting held with Ms Kristalina Georgieva, Managing Director, on the margins of the 2024 IMF/World Bank Group Annual Meetings in Washington, DC (USA).
At the end of the meeting, Mr Edun and Ms Georgieva stated that the region was still navigating a complex economic landscape, characterised by geopolitical fragmentation, elevated borrowing costs, and the ongoing high cost of living.
They noted that the challenges had made policy making difficult with some countries facing social instability and insecurity, imposing heavy human costs on populations.
The development, they noted, was undermining growth prospects and exacerbating economic vulnerabilities, while creating acute trade-offs in policy making, further complicating the objectives of promoting inclusive development.
“Yet, progress has been made in bringing down inflation, stabilising public debt, and pressing ahead with reforms. Looking ahead, growth is expected to soften next year, with significant variation across the region,” they said.
The Caucus and the Fund pledged their commitment to working together to strengthen Africa’s resilience to address the many challenges facing the continent.
“Renewed focus on enhancing domestic resource mobilisation is critical and it should be supported by governance reforms to improve public financial management, fiscal transparency, and enhance accountability,” they said.
The Caucus and the Fund welcomed the launch of the Joint Domestic Resource Mobilization Initiative (JDRMI) by the IMF and World Bank.
The initiative is aimed at improving domestic revenue mobilisation, enhancing spending efficiency, and developing domestic financial markets.
Again, they welcomed the IMF Executive Board approval of the use of SDRs for the acquisition of hybrid capital instruments issued by prescribed holders, to allow members to channel SDRs to Multilateral Development Banks as part of their capital.
GNA
