IMF MD Georgieva: ‘We must build African economies with a strong immune system’

By Aurélie M'Bida, Joël Té-Léssia Assoko
Posted on Monday, 21 February 2022 13:50

IMF’s managing director Kristalina Georgieva meets with the DRC’s President Felix Tshisekedi in Kinshasa, DRC, 8 December 2021. © Hereward Holland/REUTERS

The EU-AU summit took place in Brussels on 17 and 18 February. As such, the IMF's managing director Kristalina Georgieva explains the role that the institution intends to play in helping African economies recover. This is the first part of an exclusive interview with us.

On 17 and 18 February in Brussels, the main leaders of the European Union (EU) and African Union (AU) discussed a wide range of subjects, including peace, security and governance in West Africa, vaccine production and health systems, growth financing, support for the private sector, agriculture and sustainable development, and climate change.

The agenda also included everything from the Covid-19 crisis, which has aggravated the imbalance between the Old Continent and Africa, to the coups d’état in West Africa.

On this occasion, the IMF’s managing director Kristalina Georgieva reiterated the institution’s pledge to support African economies as they restore sustainable and efficient growth, and ensure a rebalancing between “prosperous states” and those that are expected to become so.

Georgieva – who, alongside the World Bank, has been at the forefront in setting up a $650bn Special Drawing Rights (SDR) allocation to overcome the effects of the crisis – told us about her main concerns on the eve of the summit.

Apart from the security issue in the Sahel, several topics were discussed during the EU-AU summit that was directly linked to the consequences of the health crisis. What are the economic issues at stake?

Kristalina Georgieva: The global economy is recovering from an extraordinary crisis. But the rehabilitation remains uneven and there is a very high risk of disparities between countries, as some are improving faster thanks to massive political support and vaccination, while others are falling behind. Overcoming this disparity is critical, as most African countries are feeling a sense of urgency. We used this summit as an opportunity to draw attention and build support for a robust African recovery.

What is the IMF’s message?

Firstly, a global effort is needed to build defences against the pandemic in Africa. This includes overcoming vaccine inequalities, but also preparing for the future by strengthening African vaccine production capacity.

The pandemic has also created a significant financial gap. For the continent, we estimate that we will need $285bn between 2021 and 2025 just to overcome the effects of Covid-19. It will take about twice as much to get Africa back on track economically and be on par with advanced countries.

These sums can be mobilised if the countries concerned take the necessary steps to reform and adopt sound national policies to help attract more financing from the international community and private capital flows. Debt resolution is also part of this resource mobilisation.

In fact, at the summit, I announced the launch of an international finance working group, which aims to mobilise financing in a more systematic and strategic way. Ghana’s finance minister and the Economic Commission for Africa’s secretary-general came up with this idea, and I immediately agreed to it!

Finally, the crisis offers an opportunity for economic transformation by moving towards digitalisation and shifting to climate-resilient, low-carbon development.

Coming back to vaccination, you said last year that vaccination would be the most important economic policy in 2021. Do you think you’ve been heard, given that the targets for Africa have not been met? 

The glass is half full. It is true that only seven African countries reached the target of 40% immunisation by the end of 2021. But on the other hand, we also saw supply constraints relax and a significant increase in vaccine deliveries, including in Africa.

There is still a long way to go. The biggest challenge is to get these delivered vaccines into people’s arms. That means working to strengthen distribution, health systems in some countries, self-sufficiency in production and overcoming vaccine hesitancy.

You have just returned from a recent trip to Africa, during which you visited Senegal, which is looking to manufacture vaccines. What did you learn?

Indeed, one of the most striking moments of my last trip to Africa was visiting Dakar’s Pasteur Institute. Senegal is developing its own vaccine production capacity, as are five other African countries (Algeria, Egypt, Morocco, South Africa and Rwanda). We are very much in favour of this initiative. Because we are not just talking about Covid-19, but about the health of Africans in Africa.

When we discussed with President Macky Sall how the Special Drawing Rights (SDRs) allocated to Senegal could be used, I was delighted to learn that some of it would be injected into domestic production. A number of other countries have also chosen to use some of their SDRs to strengthen their health systems in order to deal with the pandemic, which is the right thing to do.

To summarise, your expectations for this summit were high, especially with regard to your European partners…

Absolutely. I think that the collaboration between Europe and Africa will be strengthened. This is important for growth and employment in Africa. But it is also in Europe’s interest. Africa can be a prosperous neighbour. Not only a more prosperous neighbour, but also a better neighbour from an economic and security point of view.

The preparations for the summit focused on the issues of resource mobilisation, vaccine production and, more broadly, the development of the pharmaceutical industry in Africa. And how the countries involved can strengthen their own institutions and governance capacities.

Mobilising finance is important to us at the IMF. But equally significant is building economies with strong “immune systems”, as well as secure policies and institutions for Africa’s future.

Europe can contribute by sharing its own experience. The ‘Old Continent’ has also developed by working together to help countries with weak institutions and policies to strengthen and rebuild themselves. Like my own country of Bulgaria.

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