Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

Amer: IMF, WB Funds for Africa Not Sufficient to Tackle COVID

Fri 07 Aug 2020 | 07:38 PM
Taarek Refaat

Tarek Amer, Governor of the Central Bank of Egypt (CBE) stressed that Funds from the International Monetary Fund (IMF) and the world Bank Group (WBG) are not sufficient to tackle the consequences of the coronavirus pandemic

This came during his participation in a virtual meeting  with Governors of the WBG and the IMF in the 2020 African Causus Meeting hosted in Yaounde, Cameroon.

The meeting was chaired by Cameroon's Minister of Economy, Planning and Regional Development, Alamine Ousmane Mey under the theme "Protecting Africa's Human Capital in the face of COVID-19 : Saving Lives, Preserving Well-being and Safeguarding Productivity and Jobs."

In his speech, Amer pointed out that the financing provided to African countries by the International Monetary Fund and the World Bank does not represent what is required to lift the economies of the countries from their economic crises, stressing the importance of relying on that financing on concrete indicators to determine the appropriate size of the funding required to achieve actual results in confronting the effects of the Coronavirus.

Amer also stressed that the volume of financing reviewed by the IMF and the WB during the meeting, which amounted to about $3 billion, should be commensurate with the volume of imports in the African market, which recently reached about $549 billion in goods and services.

The governor stated that foreign currencies for African countries are considered a ring buoy under normal circumstances, as a large percentage of them cover the continent's food imports, despite smuggling abroad a large percentage of it into safe havens.

In this regard, Amer called on both the Monetary Fund and the World Bank to open the door to negotiations with the G7, regarding the illicit financial flows that the continent loses in favor of developed countries.

He also called on developed countries to change their methodologies towards assisting African countries in order to achieve effective results in light of the significant increase in poverty conditions, stressing the importance of including the African continent in the incentive package launched by developed countries, which amounts to $4 trillion.

Moreover, the Governor of the CBE called on African countries to devise new solutions, including formal agreements for foreign exchange, as well as providing guarantees for managing African countries' debt from global financial markets on easy terms in order to provide foreign currencies and stimulate exit from the current crisis.

On his part, Cameroon's Prime Minister Joseph Dion Ngute chaired the opening ceremony and gave guiding principles to help the Governors of the African continent face the consequences of the pandemic.

 "The crisis will undoubtedly lead us to review our economic models, fill the lapses in our health systems and rethink the place of human capital in the developmental process. It is now up to us to launch a strong, coherent and concerted response to curb the pandemic," he said.

"In the face of a collective threat, we must form a common front and remain in solidarity for there is no common destiny without collective action," he noted, adding on what African States need to do," the prime minister added.

"We need to make our states more resilient to future external shocks and crisis. More than in the past, human capital must be at the center of our development policies," he pointed out.

African States have to give priority to strengthening health infrastructure and services to provide better care for the populations, strengthen and expand social protection and security systems, especially for vulnerable groups.

He urged the WBG and IMF to take more sustained and ambitious actions in favor of Africa in terms of access to funding as "The crisis will have a significant impact on African economies."

The Prime Minister stated statistics from the World Health Organisation that indicate that more than 18 million cases of COVID-19 have been reported and about 550,000 people have lost their lives.

"The pandemic in addition to wiping out the efforts made in recent years for economic and social development, is likely to increase inequalities, plunge more people into poverty and the achievement of Sustainable Development Goals is seriously compromised," he added, pointing out hat the world economy is likely heading towards recession like the case in 1929.

Minister Alamine Ousmane Mey in his welcome statement while lauding the valuable support of the World Bank Group and the International Monetary Fund to African countries to tackle the COVID-19 pandemic, cited some of its economic consequences to include drop in economic growth, degradation of public finances, and loss of jobs.