A unanimous call for additional liquidity, $500-billion in special drawing rights (SDR), better market access, more concessional resources and an extension in the Debt Service Suspension Initiative (DDSI) was issued following a meeting between representatives from the Economic Commission for Africa (ECA), the International Monetary Fund (IMF) and African Ministers in charge of finance.
The virtual meeting, which was convened by the ECA and IMF on February, was attended by various African Ministers, as well as ECA executive secretary Vera Songwe and IMF MD Kristalina Georgieva.
The objective of the meeting was to “seek IMF support in forging a way out of the crisis by transforming existing liquidity instruments and easing market access to alleviate the debt burden and provide much needed liquidity for the continent,” said Songwe.
The participants agreed on the need for a concerted effort to accelerate reforms to increase revenues, improve expenditure and manage debt to attract more private sector investment into Africa.
Ghana Finance and Economic Planning Minister Ken Ofori-Atta questioned why the DSSI was not being extended by two years, instead of six months, and said the cascading effects of Covid-19 were “a frightening thing for a finance minister to witness when they don’t have the means to respond”.
On access to the markets, Egypt’s Finance Minister Mohamed Maait said, “there’s a strong case for vulnerable countries to access the markets at affordable rate to afford essentials such as personal protective equipment and food for their populations”.
Equitable access to Covid-19 vaccines was highlighted as an imperative for building forward better, as the world stands to lose an estimated $9-trillion if only the rich get Covid-19 vaccines, Georgieve commented, noting that 40% of this loss would be in advanced economies.
In addition to vaccine availability, Songwe stated that the issue of distribution and deployment were also worthy of serious attention, and that it was for this reason countries needed additional fiscal space and less austerity.
Georgieva noted that in order to build forward better, there is need for “bold and immediate action for response, recovery, and reset of African economies,” adding “liquidity and financing response is the bridge to vaccines and recovery”.
Noting that Songwe’s call, together with finance Ministers, to triple concessional financing was “critical in the Spring Meetings’ conversations last year”, Georgieva urged the Ministers to prepare for a focused and practical discussion during the 2021 Spring Meetings.