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African Consultative Group Meeting: Statement by the Chairman of the African Caucus and the Managing Director of the International Monetary Fund (IMF)

WASHINGTON D.C., United States of America, April 23, 2018,-/African Media Agency (AMA)/-  Governor Tarek Amer, Chairman of the African Caucus, and Ms. Christine Lagarde, Managing Director of the International Monetary Fund (IMF), co-chaired the African Consultative Group meeting today (April 22, 2018) at the IMF Headquarters. They issued the following statement after the conclusion of the Group’s meeting in Washington:[1]

“We had very productive discussions on Africa’s economic developments and prospects. Growth began to recover in 2017 and is expected to continue to strengthen in 2018. But, growth remains too low on a per-capita basis, and there are significant downside risks to the outlook. These risks include a sharp tightening of global financial conditions, weaker than expected growth in key advanced and emerging economies, escalating trade tensions and ongoing security concerns.

“Against this backdrop, we agreed that reducing macroeconomic vulnerabilities and boosting private investment is necessary to lay the groundwork for transforming the current recovery into a sustainable growth spell and accelerating progress towards the SDGs. In particular, with public debt levels rising rapidly in many countries, containing debt vulnerabilities while creating room for much needed development spending requires continued efforts to boost revenue mobilization. In addition, sustainable growth and job creation requires reinvigorating private investment. We concurred that deepening financial systems and boosting FDI would help expand financing to the private sector. Advancing regional integration holds immense potential. Finally, other initiatives, such as public-private partnerships and special economic zones, can play a catalytic role in promoting structural transformation, but care is needed to contain contingent fiscal risks.”

Governor Tarek Amer noted that “we agreed on the need to accelerate structural reforms and access to finance in order to raise overall investment and medium-term growth rates to support job creation. The Fund, through its policy advice, can assist countries to design and implement growth-friendly fiscal adjustment, when needed, that responds to the country-specific sources of debt vulnerabilities while preserving needed investments in infrastructure, human capital, and other priority expenditures. In this context, countries need space to provide an appropriate social safety net and address security threats in order to maintain social cohesion. The Fund can support efforts to prioritize structural reforms, drawing on lessons from successful experiences of diversification, improved competitiveness, and fighting corruption, including by limiting illicit flows. We call on the Fund to continue to support, through policy advice and capacity building, the regional and international initiatives aimed at reinvigorating private investment, trade, debt management, and to assist countries to take advantage of the opportunities provided by digitalization.”

Ms. Lagarde stated that “the IMF will remain closely engaged with its African members. The Fund will continue to support the authorities’ efforts to address the current macroeconomic and structural challenges and achieve a stronger and durable and inclusive growth.”

[1] The African Consultative Group comprises the Fund Governors of a subset of 12 African countries belonging to the African Caucus (African finance ministers and central bank governors) and Fund management. It was formed in 2007 to enhance the IMF’s policy dialogue with the African Caucus. The Group meets at the time of the Spring Meetings, while Fund Management meets with the full membership of the African Caucus at the time of the Annual Meetings.

Distributed by African Media Agency (AMA) on behalf of International Monetary Fund (IMF).