African states need $ 1.2 trillion in funding until 2023 to overcome the crisis caused by the COVID-19 pandemic, the IMF Managing Director announced on Friday, stressing that some 345 billion was currently missing.
Commitments from official bilateral lenders and international institutions cover less than a quarter of forecasted needs, while private capital is still limited, lamented Kristalina Georgieva in a speech at a virtual event called “Mobilization in favor of Africa ”.
In April, the International Monetary Fund estimated the funding shortfall at 44 billion for 2020 alone.
It is imperative that all countries and institutions mobilize more to help Africa cope with the crisis, continued the patron of the institution in Washington.
According to her, the pandemic will not be able to stop if it is not controlled in regions like Africa.
The continent has more than one million cases of COVID-19, and 23,000 people have died from it, the IMF said.
GDP is expected to contract by at least 2.5% in 2020, “which represents one of the worst results ever recorded for the continent”, according to the Fund.
The Bretton Woods institution estimates that the recovery should start next year, but real GDP will not reach its pre-crisis level until 2022.
“The deterioration of economic conditions and the loss of jobs could lead to a drop in household income of up to 12% this year,” said Kristalina Georgieva.
As a result, up to 43 million more people could be pushed into extreme poverty in Africa, wiping out five years of progress in poverty reduction.
“The crisis is also jeopardizing the progress of the last decade in terms of strengthening human capital, in particular improving health, schooling and reducing stunting,” notes the Fund.
The IMF has dramatically increased its financial assistance to Africa, providing around $ 26 billion to more than 40 countries in 2020, “nearly ten times the annual average of the past decade as a percentage of GDP ”.
However, he combined this emergency aid with the obligation for local authorities to use these funds to combat the effects of the pandemic. Countries will need to publish audits regularly to be transparent.
The IMF is pleased that several countries have already enacted laws and created supervisory bodies, citing Burkina Faso, the Central African Republic and The Gambia.
It also provided grants for debt service relief to 22 African countries.
For its part, the World Bank through IDA (the international development association) and the IBRD (The International Bank for Reconstruction and Development) provided about $ 21.9 billion in loans.
While these countries lack everything, emergency operations aim to strengthen health systems, support containment measures, provide essential medical equipment and expand social protection programs.
Longer-term development projects must also “lay the foundations for a solid and sustainable recovery in Africa”, underlines the IMF.
In addition, the World Bank is currently working on a financing plan to support equitable access to vaccines and their distribution in African countries.
At the end of September, she asked her Board of Directors to approve additional funding of $ 12 billion to help poor countries buy and distribute vaccines against COVID-19.
He is expected to give the green light next week as part of his fall meetings.