Washington, DC: Mr. Wale Edun, Nigeria's Minister of Finance and Chair of the African Caucus and Ms. Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), issued the following statement at the conclusion of the African Consultative Group[1] (ACG) meeting:
"We had an opportunity to engage on Africa's standing in a world economy buffeted by compounding shocks. As the global economy approaches a soft-landing, the outlook for Africa is also gradually improving with growth expected to reach 3.5 percent in 2024 and 4 percent in 2025. Nearly two thirds of the countries on the continent are anticipating higher growth this year, on the back of the modest easing in global financial conditions and a recovery in private investment and consumption. In addition, some countries have returned to international capital markets after almost a two-year hiatus.
"Despite these glimmers of hope, growth is still too weak to secure improvements in standards of living and there is a growing income divergence between the continent and more advanced countries post-pandemic. Many governments in Africa continue to grapple with financing shortages, whereas high debt service costs reduce budgetary space for priority investment and social spending and limit countries' ability to deal with future shocks. At the same time, some countries continue to experience climate shocks such as severe droughts and floods which exacerbate food insecurity and poverty.
"The Group called for strengthening Africa's resilience to surmount the multi-faceted challenges facing the continent. Countries' domestic adjustment policy efforts and structural reform agendas stand to yield better outcomes if accompanied by access to adequate and affordable financing. The ACG underlined the necessity for the upcoming review of LICs facilities to adapt to the changing global environment to continue serving vulnerable members. The Group also stressed the need to keep all financing options on the table and encouraged coordination with the World Bank's 21st Replenishment of the International Development Association (IDA21).
"We agreed to continue to work together to capture the new opportunities brought about by the climate transition and the digital transformation, especially the arrival of artificial intelligence. Acting decisively on all fronts offers a chance to accelerate growth and prosperity in a fast-moving world. The PRGT Review should achieve the right balance between the short-term pressures from high demand against the long-term sustainability. Resilience is also important to deliver on climate ambitions, both Nationally Determined Contributions (NDC) and the African Union's Agenda 2063. As such, the Fund and other partners should help the continent tap into green financing . Strengthening financial sector resilience would also be important.
"The Fund remains an agile institution that evolves and adapts to the changing needs of the membership and that is committed to support Africa's resilience."
[1] The African Consultative Group comprises the Fund Governors of a subset of 12 African countries belonging to the African Caucus (African finance ministers and central bank governors) and Fund management. It was formed in 2007 to enhance the IMF's policy dialogue with the African Caucus. The Group meets at the time of the Spring Meetings, while Fund Management meets with the full membership of the African Caucus at the time of the Annual Meetings.
