Climate Change: IMF, World Bank Vow to focus on African To Restore its Economy
By Fatima Saka
As African countries grapple with the challenges posed by climate change disasters and related issues, the International Monetary Fund (IMF) and the World Bank have declared their commitment to prioritize Africa in their efforts to foster global economic growth and stability.
This marks a historic move, coming after five decades of criticism regarding the underrepresentation of poorer nations within these institutions. Both organizations have recently announced plans to allocateadditional seats on their executive boards to African nations.
The declarations were made during the annual meetings of the IMF and the World Bank, the two most influential economic policy-making bodies globally. IMF Managing Director Kristalina Georgieva emphasized their dedication to the African continent during a panel discussion with African entrepreneurs, stating, “Africa, we are here.”
The IMF and the World Bank play a pivotal role by providing substantial loans and assistance to bolster struggling economies and encouraging countries with deficits to implement reforms aimed at promoting stability and growth. They argue that policies denying economies access to credit and loans without maintaining balanced budgets often force governments into difficult choices, such as tax reforms or subsidy reductions for essential goods like food and energy.
Nadia Fettah, Morocco’s Minister of Economy and Finance, highlighted the repercussions of such policies, saying, “While these policies may intend to prevent countries from defaulting, servicing high-interest loans in Africa diverts resources away from critical needs, particularly in the areas of youth development and infrastructure.”
She further emphasized the need for a comprehensive approach, stating, “When we discuss the allocation of financial resources, it’s crucial to recognize that we shouldn’t have to choose between food security and managing debt, or between climate finance and foreign investment. Emerging countries require all of these elements, and the future of global growth is intrinsically tied to the growth of Africa.”
Iskander ErziniVernoit, Director of the Morocco-based Imal Initiative for Climate and Development, also chimed in, saying, “This is a period marked by multiple crises, particularly affecting Arab and African countries that have been impacted by various external shocks beyond their control.”
Vernoit raised a pressing concern, stating, “There exists a significant financing gap, amounting to trillions, for developing countries. Additionally, the accessibility of financing remains a critical question.”