Cushioning The Effects of Covid-19 : Africa Makes Wide-ranging Proposals
Members of the African Consultative Groups (ACG) of the International Monetary Fund (IMF) and World Bank Group (WBG) have welcomed the joint call made by WBG President and IMF Managing Director to the G20 and all official bilateral creditors to help all IDA, small states and middle income countries through debt relief, allowing them to concentrate their resources on fighting the pandemic. In a statement presented to Heads of the Bretton Woods Institution by the Chairperson of ACG, Cameroonian-born Alamine Ousmane Mey who doubles as the country’s Minister of the Economy, Planning and Regional Development, Africa needs varied assistance to stand the test of the ravaging pandemic.
While saluting the decision to lessen debt burden on some African countries, ACG through the voice of Minister Alamine Ousmane Mey pleads for more concerted efforts to bail the continent, its peoples and livelihoods out of the dreaded virus whose consequences are far-reaching. “We further call for debt forgiveness for the African countries and make a plea to G20 leaders and other creditors to allow African countries to suspend all repayments of official bilateral credit in order to provide fiscal space to combat COVID-19,” partly reads Minister Alamine Ousmane Mey’s presentation to the Heads of the Bretton Woods Institution.
The choice of the statement is due to the scare created by the virus which forces ACG to “take the option to issue the current Statement in place of our traditional meetings.” An option which permits economic leaders of the continent to maintain close dialogue with the management of Bretton Woods Institutions and to share its common concerns and priorities, as well as efforts to address recent shocks, including the COVID-19.”
Handling Health Concerns
Commending the IMF and the World Bank for their early announcements to help, the African Consultative Groups hold that, “both institutions’ rapid, judicious and flexible use of existing facilities and instruments to support governments’ efforts to address the human tragedy and the economic fallout from the pandemic is crucial.” For efficiency, the ACG calls on “the WBG and IMF to quickly operationalize the emergency financing reforms, streamline the prerequisites for rapid assistance, and simplify and speed up the processes for disbursement, while pursuing sound macroeconomic management for sustainable growth and poverty reduction.” While promising to endeavor for collective action, to cushion countries and boost market confidence, the Groups “insist on the imperative need for the Bretton Woods Institutions to preserve the diffusion of clear messages to the membership on ways to mitigate the adverse impacts of COVID-19.
Sustaining The Economies
Owing to the fact that most economies in Africa remain commodity-based, and are characterized by low productivity, poor trade connectivity to global value chains, limited access to markets, high vulnerability to commodity price shocks and jobless growth, Minister Alamine Ousmane Mey prays for concerted efforts to create sustainable jobs. This, through investing in human capital while accelerating the pace of economic transformation. “Devising a clear institutional arrangement to reinforce the implementation of the framework will help strengthen this focus. We also urge the IMF to explore options on programme design and conditionality to better accommodate the objectives of job creation and economic transformation,” the ACG statement reads.