Africa can tap into new sources of finance – IMF

The International Monetary Fund (IMF) says Africa could tap into new sources of finance with radical transparency. 

Managing Director, IMF, Ms Kristalina Georgieva made the remark during a High Level Knowledge of the virtual 2021 Annual Meetings of the African Development Bank (AfDB) on Wednesday. 

Georgieva said that the pandemic was an opportunity for transformative reforms to public services, strengthen governance and boost domestic revenue mobilisation.

“Think of how digitalization can tax administration and revenue collection and the quality of public spending.

“With radical transparency, Africa can tap into new sources of finance, such as carbon offsets and there is room to encourage more private investment social and physical infrastructure, “she said. 

The IMF managing director recalled the membership’s backing of an unprecedented new allocation of Special Drawing Rights (SDRs) of 650 dollars.

According to her, once approved, hopefully end of August, the bank would directly and immediately make about 33 U. S. Dollars available to its African members.

She said it would boost members’ reserves and liquidity, without adding to their debt burden and also help address their emergency needs, vaccines.

Earlier, Dr Akinwumi Adesina, President of the African Development Bank (AfDB), commended the IMF and the G20 for the positive efforts to address the debt situation.

This, he said, included the initiatives such as the Debt Service Suspension Initiative (DSSI) and the G20 Common framework.

Adesina said the bank had the opportunity to tackle Africa’s debt challenges, more decisively, with the recent decision IMF to issue 650 SDRs.

The AfDB president expressed delight at the agreement of the African Heads of State and global leaders, at the summit on Financing of African Economies, to provide 100 billion U. S Dollars of the SDRs to support Africa.

He, however, emphasised the need to utilise the SDRs direct financing to Africa. 

“To use the Special Drawing Rights, we need new lenses, we need new approaches, for these are extraordinary times.

“These SDRs should also used to direct financing to Africa, through the African Development Bank – a prescribed holder of SDRs – to on-lend to African public development banks, to support green, climate-resilient and inclusive recovery, and the stabilisation of the economies.

“Let me clear: Africa is not looking for a free pass,” Adesina said. 

The AfDB president stressed that debt resolution must reinforced by stronger economic governance, public financial management, better and transparent management of Africa’s natural resources and mobilisation of domestic resources.

He urged African leaders not to let the pandemic mask the gains that the continent had made along the way. 

“We must sustain those gains, and do even more to help Africa get back on a faster recovery pathway,” Adesina said. 

The News Agency of Nigeria (NAN) reports that the 2021 Annual Meetings of the AfDB Group is holding from June 23 to June 25 with the theme: “Building Resilient Economies Post COVID-19  Africa.” (NAN)