Many African countries are struggling to service their debts, prompting many observers to call for urgent global action and greater involvement of African stakeholders in developing solutions.
Category
🗞
NewsTranscript
00:00Now, many African nations are facing unstable, unsustainable levels of debt
00:05exacerbated by borrowing for infrastructure and the pandemic.
00:09How is the IMF addressing Africa's growing debt crisis?
00:14We work very closely with African countries in three ways.
00:18The first one is to be a source of liquidity and reserves for them.
00:23We have provided special drawing rights allocation, which does not add to debt,
00:30it adds to reserves and liquidity.
00:32And we also provided financing on exceptionally high scale during the pandemic
00:38to help countries deal with pressing needs.
00:4116 times higher lending than in normal time.
00:45Second, we work with countries to identify when debt is not sustainable
00:51and promote debt restructuring through the common framework,
00:55as well as in the discussions of the Global Sovereign Debt Roundtable.
01:01So far, we had Chad, Ghana, Zambia, now Ethiopia, benefiting from debt restructuring.
01:09And three, we are the only institution that actually provided debt relief during COVID,
01:16about a billion dollars to the poorest 29 members, majority of them in Africa.
01:23But let me say this, our biggest role to help Africa is to support Africa to grow.
01:31So growth is the best way to beat debt.
01:35Absolutely.
01:35Speaking about Africa growing, sub-Saharan Africa has in the past
01:40been underrepresented on international organizations.
01:44Are there plans to give it a bigger role in the governance on the IMF?
01:49Yes, absolutely.
01:51Great.
01:51Absolutely.
01:52On November 1st this year, we will add one more board member
01:58from sub-Saharan Africa in our governing body, in our board of directors.
02:04And we're doing that exactly because we believe that Africa deserves to be represented more fairly.
02:12We also look around to hire highly qualified African professionals, and especially women.
02:22They are fantastic in our troops.
02:27IMF programs often emphasize fiscal tightening,
02:31which can restrict government's ability to invest in infrastructure and social services.
02:36How does the IMF ensure that its policies in Africa
02:40balance fiscal discipline with the need for growth, job creation, and poverty reduction?
02:45We pay very close attention to the fiscal conditions in our member states.
02:51Why?
02:52Because fiscal stability, financial stability, is a prerequisite for countries to do well.
03:02But when we do that, we always look at the right balance
03:06between meeting the pressing needs of today against the budget constraints
03:13and the fiscal sustainability over a medium term.
03:17So in each of our countries, we look at these trade-offs very carefully.
03:24When we make decisions, they are well-informed decisions.
03:28They are owned by our members.
03:31I was very pleased today to hear from one of the prime ministers from Africa the following.
03:38It used to be when we thought of the IMF as this very strict policeman.
03:43Now we think of the IMF as a partner.
03:46Together, we put a path for development that is more sustainable.
03:52And I want to emphasize again that our main objective is stability,
03:57not for stability's sake, but as a precondition for growth and development.
04:02IMF has been a strong pillar for many African countries.
04:06What words or last parting words do you have for them today?
04:11I think Africa holds tremendous potential for the people in Africa and for the whole world.
04:18We have a youthful population.
04:20We have tremendous talent of men and women in Africa
04:27that the aging world of Europe and of Asia actually relies on.
04:32We think of ourselves as a bridge.
04:36We make conditions, investment conditions in Africa strong,
04:39so capital from the north can go where the labor force is dynamic and strong.
04:46My wish for Africa is do well for yourself, do well for the rest of the world.
04:52Thank you so much for joining us here on Deutsche Welle.