On October 22, 2024, Mr. Wale Edun, Nigeria’s Minister of Finance and Chair of the African Caucus, alongside Ms. Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), released a statement following the conclusion of an African Caucus meeting in Washington, DC.
The statement highlighted the ongoing challenges facing Africa's economic landscape, such as geopolitical fragmentation and elevated borrowing costs. The high cost of living is another concern for policymakers. Some regions are also dealing with social instability and insecurity, impacting growth prospects and economic stability.
Despite these hurdles, progress has been noted in reducing inflation and stabilizing public debt. However, growth is expected to decline next year with significant variations across different areas.
Both leaders reaffirmed their commitment to strengthening Africa's resilience against these challenges. "Policy priorities in the region are focused on securing the economic recovery," they stated. Countries experiencing reduced inflationary pressures may consider easing policies gradually while those with persistent inflation might need further tightening measures.
Fiscal policy needs careful balancing to manage debt vulnerabilities effectively. Domestic resource mobilization was emphasized as crucial for enhancing public financial management and fiscal transparency.
The IMF and World Bank have launched the Joint Domestic Resource Mobilization Initiative (JDRMI) aimed at improving domestic revenue collection and spending efficiency. The leaders supported efforts to channel affordable financing for development purposes like climate change adaptation.
They also mentioned that changes approved in reviewing the Poverty Reduction and Growth Trust (PRGT) would allow continued financial support for low-income countries without compromising sustainability. Additionally, reforms in borrowing costs under the General Resource Account will soon be effective.
The Resilience and Sustainability Trust (RST) continues providing long-term affordable financing addressing broader challenges including climate change preparedness. Continued support is encouraged to ensure RST meets increasing demands.
An increase in IMF members' quotas by 50 percent was welcomed along with more work towards quota realignment benefiting developing economies through a new formula under future reviews.