Amer calls for huge IMF, World Bank rescue package for Africa
Amer calls for huge IMF, World Bank rescue package for Africa: Central Bank of Egypt Governor Tarek Amer has called on the IMF and the World Bank to extend more than USD 500 bn in financial assistance to African countries, the local press reports. Speaking at the IMF / World Bank African Caucus of Governors, Amer said the existing funding has fallen short of what the continent needs to recover from the economic crisis caused by the covid-19 pandemic, and called for a package equal to the value of goods imported by Africa from developed countries, which he put at USD 549 bn.
What have the IMF and World Bank done so far? The IMF has so far given more than USD 24 bn in emergency financial assistance to African countries and approved debt relief for 25 countries, 19 of them in Africa. The World Bank had announced earlier this year its plans to provide a total USD 160 bn in grants and financial support to 100 developing countries as they battle with the fallout from covid-19.
What emergency assistance has Egypt received this year? The IMF has provided almost USD 8 bn in financial assistance to Egypt through one-year USD 5.2 bn standby loan and a USD 2.8 bn rapid financing instrument. Meanwhile, the World Bank approved a USD 50 mn fast-track facility to support Egypt’s covid-19 emergency response capabilities in addition to a previously agreed upon USD 400 mn loan for a universal healthcare project.
New solutions needed? Amer called on African countries to come up with new solutions to mitigate the economic damage caused by the pandemic such as foreign exchange swaps, and urged the IMF and the World Bank to negotiate with G7 states to place greater restrictions on capital flight and negotiate softer loan agreements with Western counterparts.
In a best-case scenario, Africa’s economic growth could slow down by 1.8%, or by 2.5% in a worst-case scenario, according to United Nations Economic Commission for Africa (UNECA) data International Cooperation Minister Rania Al Mashat cited during the meeting. Between 5 to 29 mn individuals could fall into poverty due to the pandemic, UNECA expects. Data from the International Labour Organization, meanwhile, forecasts that 19 mn Africans could lose their jobs amid the crisis.