AfricaPress-Tanzania: THE World Bank Group and International Monetary Fund (IMF) yesterday convened a meeting of African leaders, bilateral partners and multilateral institutions to spur faster action on Covid-19 response in African countries.
This comes in response to calls from the World Bank Group President, David Malpass, International Monetary Fund Managing Director, Kristalina Georgieva, and other partners for creditors to suspend debt repayments in order to provide much-needed support to the poorest countries.
During the meeting, President of South Africa and Chairman of African Union, Cyril Ramaphosa, United Nations Secretary General, Antonio Guterres, Director General of the WHO, Dr Tedros Adhanom Ghebreyesus, African Union Commission Chairperson, Moussa Faki Mahamat and officials of individual countries outlined their policy plans for effective use of resources, multilateral organisations, including the United Nations, pledged their continued support, and bilateral partners re-emphasized their commitment to a debt standstill beginning May 1, 2020.
“This pandemic has already had a devastating impact on Africa and its effects will deepen as the rate of infection rises. It is a setback for the progress we have made to eradicate poverty, inequality and underdevelopment,” President Ramaphosa said.
“While recent announcements from international partners are very welcome, large financing gaps remain and greater support is needed to ensure that African countries are able to respond effectively to the health crisis and address economic challenges,” he added,
Together, official creditors have mobilised up to 57 billion US dollars for Africa in 2020 alone—including upwards of 18 billion US dollars from the IMF and the World Bank each—to provide frontline health services, support the poor and vulnerable, and keep economies afloat in the face of the worst global economic downturn since the 1930s.
Private creditors’ support this year could amount to an estimated 13 billion US dollars.
This is an important start, but the continent needs an estimated 114 billion US dollars in 2020 in its fight against Covid-19, leaving a financing gap of around 44 billion US dollars.
The World Bank Group and the IMF suggested a range of financing options and policy tools as part of the pandemic response, many of which African countries are looking to implement as they plan for the medium and long-term impacts of the crisis. These include further financing from official and private sector creditors.
“The World Bank Group is putting its full capacity to work for people across Africa as they fight this pandemic,” said World Bank Group President David Malpass.
“The world has rarely seen a crisis of this magnitude, and no one can stand on the sidelines; We cannot leave any country behind in our response.
We have provided emergency support to 30 countries across Africa so far, with more to come, and will continue to advocate for debt relief and increased resources, especially for those countries hardest hit by Covid-19,”
“Our message is clear: We stand with Africa: Through our commitments today we are ‘Mobilising with Africa’ to help soften the blow of Covid-19 on the continent,” the IMF Managing Director, Kristalina Georgieva said.
The pandemic is having a monumental impact across Africa and the IMF is leaning forward with many other partners to leverage its resources and to help save lives and livelihoods.
She added that IMF will provide more concessional financing and count on others to step up and do their part, to shield the economy and the people, and provide the foundations for a strong and sustainable recovery.
It will also be critical for African countries to work together, especially on the health response and on limiting trade disruptions to ensure freer movement of medical and food supplies.
With so many people working in informal jobs–89 percent of workers in Sub-Saharan Africa alone–countries need to take immediate steps to expand social safety net programs and support workers and small enterprises.
The government services will equally need attention to keep running effectively for the duration of this crisis.
World Bank Group and IMF leaders applauded the groundbreaking accord among G20 countries to temporarily suspend debt payments to IDA and least developed countries beginning May 1, 2020.
The World Bank Group is taking broad, fast action to help developing countries strengthen their pandemic response, increase disease surveillance, improve public health interventions, and help the private sector continue to operate and sustain jobs.
It is deploying up to 160billion US dollars in financial support, 55 billion US dollars of which will be for Africa, over the next 15 months to help countries protect the poor and vulnerable, support businesses, and bolster economic recovery.
The IMF has been moving rapidly to provide comprehensive support its member countries, by leveraging our 1 trillion lending capacity; Doubling annual access limits for its rapid disbursing vehicles to about
100 billion US dollars to respond to unprecedented calls for emergency financing from more than 100 countries; Approving a short term liquidity line for countries with very strong economic fundamentals and exploring additional tools to help meet countries’ financing needs; and, revamping the catastrophe containment and relief trust to help 29 of poorest and most vulnerable members through rapid debt service relief, 23 of which are in Africa.
