The Annual Meetings of the IMF and the World Bank are being held this week in Marrakech, sparking, as every year, lively debates and questions about the economic policies and practices of these institutions. As many African countries face major economic difficulties, these Assemblies are of particular importance for the region.
The Covid-19 pandemic has quickly impacted African economies, with growing inflation, an explosion in public debt and a lack of financing. Despite these challenges, Abebe Selassie, the IMF’s Africa director, remains optimistic about the continent’s resilience and its medium-term growth prospects.
According to him, Africa has strong development potential, in particular thanks to its dynamic demographics and opportunities to catch up. It also highlights that if we consider a broader set of development indicators, we observe a significant transformation on the continent, particularly in terms of life expectancy, infant mortality and maternal mortality.
However, the debt issue remains a concern. Abebe Selassie explains that many African countries have had to borrow on financial markets to finance their investments in infrastructure, education and health. With the decrease in foreign aid, debt increased, leading to the need to seek a return on investment through the tax system.
It recognizes that lack of financing is a major challenge for many African countries and highlights the need for debt restructurings and significant financing to support reforms. It also calls for the mobilization of international resources to continue granting zero-interest loans on the continent.
Regarding the requests for reform of the SDR (Special Drawing Rights) system made by African finance ministers, Abebe Selassié indicates that discussions are underway to mobilize additional resources and ensure a more equitable distribution of these rights.
Finally, he mentions the progress made following the commitments made at the last Paris summit, notably the announcement of nearly 100 billion SDRs for IMF programs. However, it remains to be seen whether these commitments will translate into concrete results in the years to come.
There are therefore still many challenges to overcome for Africa in economic matters, but Abebe Selassie remains confident in the continent’s ability to overcome these difficulties and continue its development. The Annual Meetings of the IMF and the World Bank provide an important opportunity to discuss these issues and find solutions to support growth and poverty reduction in Africa.