The United Nations Financial Fee for Africa (ECA) as we speak launched the report: The IMF and the Way forward for the World Monetary Structure, on the Ministerial Phase of the fifth Extraordinary Session of the African Union Specialised Technical Committee (STC) on Finance, Financial Affairs, Financial Planning and Integration held in Abuja, Nigeria.
Ms. Hanan Morsy, Deputy Government Secretary and Chief Economist on the ECA who supervised and guided the report, mentioned it was ready in session with the African Ministers of Finance, Planning, and Financial Improvement, the African Union, and the African Improvement Financial institution. It proposes a brand new work agenda for the Worldwide Financial Fund (IMF) “to higher reply to the challenges that African low- and middle-income international locations are going through.”
The Report is grounded on the work of the Africa Excessive-level Working Group on the World Monetary Structure, which is coordinated by the ECA. This Group includes African Ministers of Finance, Planning and Financial Improvement, the African Union, the African Improvement Financial institution, Afreximbank, and the World Financial institution. It contains the participation of IMF workers and Government Administrators.
The Report’s key messages embrace:
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World Monetary Security Web: The IMF ought to make Particular Drawing Rights (SDR) allocation choices in a rule-based analytical method to scale back the discretionary and political nature of the allocation course of and be certain that SDRs are directed to international locations that require them.
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A New World Debt Structure: The IMF ought to suggest reforms to overtake the G20 Frequent Framework to be more practical, time-bound, and clear, strengthen the Worldwide Debt Authorized Framework, and evaluation and replace the IMF-World Financial institution Debt Sustainability Evaluation to make it extra SDG- and solvency-focused.
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The Resilience and Sustainability Belief (RST) and a New Agenda for Inexperienced Improvement: The IMF ought to facilitate the scaling up of debt-swaps-for-nature, local weather and adaptation, allow credit score enhancement for inexperienced finance, help international locations’ efforts to design and implement frameworks to draw personal finance, mobilize extra assets for the RST to permit for elevated IMF lending with longer maturities, and work along with companions to help the resilience of transition insurance policies.
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A New Agenda for Market Entry: The IMF ought to set up benchmarks primarily based on macroeconomic fundamentals, help African international locations in constructing capability to frequently accumulate and publish high-quality knowledge, broaden the IMF African Regional Technical Help Facilities (AFRITAC) mandate to incorporate help on ESG funding and inexperienced capital markets, promote world monetary stability by avoiding penalization of pre-emptive restructuring by Credit score Score Businesses (CRAs), help regulatory and oversight reforms, and help the institution of Africa regional CRA.
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An IMF for the twenty first Century: The IMF ought to recalibrate its working mannequin and lending devices to higher tackle world shocks and alleviate international locations’ liquidity wants within the quick time period and reform the quota formulation to help extra equitable entry to SDRs, make everlasting the upper entry to the Poverty Discount and Development Belief (PRGT) and the Common Assets Account (GRA), and broaden IMF advocacy and coverage work on world imbalances within the medium to long term.
In line with Ms. Morsy, the analytical work of this report has fostered a extra productive dialogue with the IMF and has additionally been instrumental in catalysing tangible progress on a number of crucial points – these embrace elevated concessional financing, a 50 per cent common quota improve, approval of the usage of SDRs to buy hybrid capital, advancing reforms to the RST to higher serve weak international locations, enhanced illustration for Africa on the IMF Government Board by means of a 3rd Chair, and discount of IMF Surcharge.
“Right now’s financial panorama calls for a reimagined IMF that genuinely serves all its member international locations. This report advocates for adjustments to empower weak nations, fostering a extra inclusive world monetary system,” mentioned Ms. Morsy, including: “Whereas substantial progress has been made, the report acknowledges that a lot work stays. The collaborative efforts amongst African nations and stakeholders shall be essential in pursuing an equitable and environment friendly monetary structure that addresses present challenges and future developments.”
To obtain the report, please go to https://www.uneca.org/the-imf-and-the-future-of-the-global-financial-architecture (English model)
Distributed by APO Group on behalf of United Nations Financial Fee for Africa (ECA).