International Monetary Fund (IMF) has called on the G20 and leading countries to transform the economies of African countries affected by Covid-19 and leave a lasting legacy rather than short-term fixes.
G20 and African countries have been implored to work together on a lasting transformation of the continent’s economy, while rebuilding after the pandemic, according to the head of the IMF.
Speaking at the end of August at a meeting of the G20 Compact With Africa, the managing director of the IMF, Kristalina Georgieva described Covid-19 as “an unprecedented crisis that requires unpreceded action”.
The Bulgarian economist thanked the G20 for supporting the IMF’s allocation of USD 650 billion in special drawing rights (SDRs) to fight the coronavirus, but warned that a short-term response, such as after the 2008 financial crisis when USD 250 billion in SDRs was used “simply to boost reserves”, would be a missed opportunity for more substantive long-term change: “We have to use this unique opportunity for strategic transformation of countries – transformation that is going to be driven by this crisis.”
She called on African leaders to use these resources strategically, for top priorities. And, of course, self-resilience on health is a top priority.
She asked countries which have received SDRs “but are not in dire need” to lend the money on to other countries which are facing greater hardships.
In April 2020, an IMF report warned that Sub-Saharan Africa faced a particularly unprecedented health and economic crisis due to the pandemic.
The IMF’s response to the pandemic was swift and decisive, it stepped up its support with the resources it had however, it acknowledged that this would be not enough for a crisis of this magnitude.
She said that the organisation hoped to boost its trust for poverty reduction and growth, and would tackle the climate crisis by establishing a new trust for resilience and sustainability.
“We should not take for granted that CO2 emissions in Africa are going to stay low. As Africa grows, as its population grows, unless there is determined, strong investment in a less carbon‑intensive development path, we will see Africa struggling to stay low in carbon emissions – in a crisis that affects Africa the most,” she warned.
Early in the pandemic, the IMF provided economic support to African countries through its rapid credit facility, with subsequent rounds of backing in the subsequent months
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