Countries and institutions must do more to help African states weather the global pandemic and its economic impact, the International Monetary Fund said on Friday, noting the region faced a projected financing gap of $345 billion through 2023.
IMF Managing Director Kristalina Georgieva told a conference that African states had spent an additional 2.5% of gross domestic product on average to help their populations, and institutions like the IMF had also stepped up, but more aid was needed. Private lending also remained subdued, she said.
“The pandemic will not be over anywhere until it is over everywhere,” Georgieva said. “All of us, countries and institutions, must do more to support Africa to cope with the next phase of this crisis.”
Despite sizeable domestic adjustments, African states still need $1.2 trillion in financing through 2023, she said, adding that some heavily indebted countries were being forced to choose between debt service and additional health and social spending.
Current commitments from international lenders and official bilateral creditors would cover less than a quarter of the projected needs, and private lending remained limited, leaving the projected $345 billion funding gap, she said.
The pandemic, coupled with a collapse in commodity prices and a plague of locusts, have hit African economies particularly hard, putting 43 million more people at risk of extreme poverty, according to World Bank estimates. African countries have reported more than 1 million coronavirus cases and some 23,000 deaths.
The IMF is calling on members to make new pledges so the fund can increase its concessional lending capacity, and to loan their Special Drawing Rights – the IMF’s currency – to poorer countries.
It also backs an extension of the Group of 20’s moratorium in official bilateral debt payments beyond the end of 2020, and steps to strengthen the architecture for debt restructuring.