Address six issues, Africa tells IMF

Samuel Kamndaya

African finance ministers and their central bank governors have highlighted six issues that they would want the International Monetary Fund (IMF) to address to sustain its partnership with their countries.

The terms are spelt out in a joint statement drawn by the finance ministers and bank governors and presented at the two-day Africa/IMF conference that started in Dar es Salaam yesterday.

Convened to tackle issues pertaining to the ongoing global economic crisis, the conference brings together finance ministers and central bank governors from all over Africa, IMF managing director Dominique Strauss-Kahn and other dignitaries.

The suggestions by the ministers are aimed at making sure that IMF plays a central role in helping Africa to cushion itself from adverse effects of the global economic crisis.

"We believe the Fund, as an institution with near universal membership and a mandate that encompasses macro-financial stability, is uniquely placed to help facilitate, promote and coordinate appropriate national and multilateral responses to the crisis,"the joint statement says in part.

Top on the agenda is Africa's desire to see IMF enhancing its scrutiny of the world's financial sector.

The utmost aim of the close scrutiny should be to check the extent to which the world economy will be affected by the crisis and how the Fund can cooperate with affected countries to mitigate the risks.

African ministers want the IMF to regard its involvement in saving countries from the current crisis as a matter of urgency.

They also want the Breton Wood institution to review its financing toolkit with a view to increasing financing to low-income countries.

In this regard, they want the IMF to make accessible to them through concessions, resources that it holds through the General Resources Account (GRA).

The GRA contains IMF's holdings of members' currencies, Special Drawing Rights (SDRs) which refer to terms of a basket of major currencies used in international trade and finance, gold, and other assets.

The holdings are principally derived from quota subscription payments plus any activated borrowings.

Concessional terms for GRA assets, they say, need to be equal to those provided under the Poverty Reduction and Growth Facility (PRGF), a facility through which the Fund lends to low-income countries at lower interest rates.

African finance ministers and central bank governors are also asking for the IMF to coordinate yet another batch of debt relief.

"We urge that the institution sustains its efforts in encouraging non-Paris Club and official bilateral and commercial creditors to increase their delivery of debt relief," reads a sentence in the joint statement.

They have expressed concern about Africa's representation in the IMF machinery and now want some Africans to feature in the IMF executive board, with a deputy managing director hailing from the continent.

On policy dialogue and technical assistance, Africa wants the IMF's technical assistance and training to be adjusted and strengthened to accommodate what they term as 'new aspects of the structured policy dialogue'.

In this regard, they want the Fund to support capacity-building programmes especially those related to strengthening monetary and financial systems.

Africa wants IMF to help it in deciding the right size of fiscal space required to get financing for infrastructure development.

This should involve helping them to design appropriate regulatory framework to manage public private partnerships.

Earlier, the IMF managing director said his institution would double its financial support to Africa to mitigate the impacts of the current crisis.

It will also review its financing facilities for low-income countries so that they can become flexible and meet the demands of low-income countries.

This will involve designing projects that cater for short-term loans.

Source: http://thecitizen.co.tz

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