Nigeria and 11 other members of the African Consultative Group (ACG) have called for adequate and affordable financing to ensure that structural reform agendas produce the desired result.
The members made this known at the end of their meeting with the International Monetary Fund (IMF) in Washington D.C..
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.
In a joint statement issued 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.
“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 global economy approached a soft landing, the outlook for Africa was also gradually improving with growth expected to reach 3.5 per cent in 2024 and four per cent in 2025,” they said.
The executives said nearly two-thirds of the countries on the continent were anticipating higher growth in 2024, on the back of the modest easing in global financial conditions and a recovery in private investment and consumption.
“In spite of these glimmers of hope, growth 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.
“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.”
They said countries’ domestic adjustment policy efforts and structural reform agendas stood 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 (IDA21).
“We 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.
“ Acting decisively on all fronts offers a chance to accelerate growth and prosperity in a fast-moving world.
“The Poverty Reduction and Growth Trust (PRGT) Review should achieve the right balance between the short-term pressures from high demand against long-term sustainability. “
The executives said that resilience was also important to deliver on climate ambitions, both Nationally Determined Contributions (NDC) and the African Union’s Agenda 2063.
“ As such, the fund and other partners should help the continent tap into green financing. Strengthening financial sector resilience would also be important.
“The fund remains an agile institution that evolves and adapts to the changing needs of the membership and that is committed to support Africa’s resilience.”
The ACG was formed in 2007 to enhance the IMF’s policy dialogue with the African Caucus.
