New report advocates for International Monetary Fund (IMF) reforms to empower low- and middle-income countries – Africa.com
The United Nations Economic Commission for Africa (ECA) released this report today: The International Monetary Fund and the future of the global financial architectureat the fifth extraordinary ministerial session of the African Union’s Specialized Technical Committee (STC) on Finance, Monetary Affairs, Economic Planning and Integration in Abuja, Nigeria.
Ms Hanan Morsi, Deputy Executive Secretary and Chief Economist of ECA, who oversaw and guided the report, said the report was prepared in consultation with African Ministers of Finance, Planning and Economic Development, the African Union and the African Development Bank. It proposes a new work agenda for the International Monetary Fund (IMF) “to better respond to the challenges facing low- and middle-income countries in Africa”.
The report builds on the work of the committee High-Level Working Group on Global Financial Architecture for Africacoordinated by ECA. The group consists of African finance ministers, planning and economic development ministers, the African Union, the African Development Bank, the African Export-Import Bank and the World Bank. It includes the participation of IMF staff and executive directors.
Key messages from the report include:
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Global Financial Safety Net: The IMF should make Special Drawing Rights (SDR) allocation decisions using a rules-based analysis to reduce the arbitrariness and politics of the allocation process and ensure that SDRs flow directly to countries in need.
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The new global debt architecture: The IMF should propose reform plans to overhaul the G20 common framework to make it more effective, time-bound and transparent, strengthen the legal framework for international debt, and review and update the IMF-World Bank debt sustainability analysis , making it more aligned with sustainability goals and solvency-focused.
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The Resilience and Sustainability Trust (RST) and the New Agenda for Green Development: The IMF should promote the expansion of debt swaps in the fields of nature, climate and adaptation, provide credit enhancement for green finance, support countries’ efforts to design and implement frameworks to attract private financing, and mobilize more resources for scientific and technological innovation to promote green finance. develop. Increase longer-term IMF lending and work with partners to support the resilience of transition policies.
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A new agenda for market access: The IMF should develop benchmarks based on macroeconomic fundamentals, support African countries in building the capacity to regularly collect and publish high-quality data, and expand the mandate of the IMF’s African Regional Technical Assistance Center (AFRITAC) to include ESG investments and Support for green capital markets, promote global financial stability by avoiding pre-emptive restructuring penalties by credit rating agencies (CRAs), support regulatory and supervisory reforms, and support the establishment of an African regional credit rating agency.
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The International Monetary Fund in the 21st Century: The IMF should realign its operating model and lending instruments to better respond to global shocks and ease countries’ short-term liquidity needs, and reform the quota formula to support more equitable access to the Special Drawing Rights, enabling poverty reduction and growth Permanent Higher Access to the Trust Fund (PRGT) and the General Resources Account (GRA), and expand the IMF’s advocacy and policy work on medium- and long-term global imbalances.
Ms. Morsi said the analytical work in this report facilitated a more productive dialogue with the IMF and helped to promote tangible progress on several key issues, including an increase in concessional financing and a 50% increase in overall quotas. , approving the use of Special Drawing Rights to purchase hybrid capital, advancing RST reforms to better serve fragile states, strengthening African representation on the IMF’s Executive Board through a third president, and reducing IMF surcharges.
“Today’s economic landscape requires a reimagined IMF that truly works for all its members. This report advocates for changes that empower vulnerable countries and foster a more inclusive global financial system,” Ms. Morsy said, adding: “While substantial progress has been made, the report acknowledges that much work remains to be done. Collaboration among African countries and stakeholders is critical to pursuing a fair and efficient financial architecture, addressing current challenges and future development Very important.”
To download the report, please visit https://www.uneca.org/the-imf-and-the-future-of-the-global-financial-architecture (English version)
Distributed by APO Group on behalf of the United Nations Economic Commission for Africa (ECA).
