The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, has approved $1.4bn emergency financing for Ukraine – after warning that the war in Ukraine by Russia also threatens to slow down Africa’s progress in recovering from the damage of the COVID-19 pandemic.
The director disclosed this in a statement on Thursday, 10th March, where she also expressed IMF’s willingness to help African nations reduce the cost of any needed policy adjustments by advising governments on policies, capacity development, and lending. The director also added that recent reforms by the IMF provide greater flexibility to help meet financing needs.
Kristalina also revealed that policymakers from Africa had earlier expressed a growing concern for their various nations about the ongoing crisis.
Although the ripple effects of Russia’s invasion of Ukraine is taking a toll globally, Africa is particularly a vulnerable region as the war has affected the region in four major channels – increased food prices, higher fuel costs, lower tourism revenues, and potentially more difficult access to international capital markets.
Speaking about the ongoing crisis, the director disclosed: “A recalibration of policies appears inevitable in many countries. At this difficult moment, the fund stands ready to help African countries reduce the cost of any needed policy adjustments through policy advice, capacity development, and lending. Recent reforms to the fund’s lending toolkit provide greater flexibility to help meet financing needs.”
The IMF had in 2020 provided 13 times its average annual lending to sub-Saharan Africa with increased access limits to its zero-interest lending policies for Africa. In facilitating the progress for Africa, the IMF also disclosed that it will support Ukraine with $1.4 billion in emergency financing.
The international financial institution revealed that its support for Ukraine is important to reduce the effect of the war on other regions like Africa.
Investors King recalls that the IMF had earlier revealed in a report – specific to the Democratic Republic of Congo – that Russia’s invasion of Ukraine risks slowing down the economic recovery from the coronavirus pandemic. The report estimates that following the pandemic and global lockdown, D.R. Congo’s economy grew 5.7% in 2021 with the inflation rate sitting at 5.3% However, with the ongoing war, the economic outlook for many Sub-Saharan African Regions, remains “favourable.”
