African governors request for aid to guard economies
Posted Wednesday, October 16 2013 at 01:00
Kampala- Governors of central banks in Africa have asked the World Bank and the International Monetary Fund to raise more resources for African states to guard against risks spilling over into their economies from the developed countries.
Due to forces of globalisation, African economies are prone to the negative impact of economic crisis spilling over from advanced economies. However, they lack the capacity in form of money to mitigate such risks.
The World Bank Group (WBG) and the International Monetary Fund continues to play a major role in African economies by providing financial resources through concessional lending as well as providing technical policy advice to African governments.
In a meeting of the African central bank governors/finance ministers and the World Bank Group president and the IMF managing director in Washington DC last week, the governors agreed: “We call on the IMF and the WBG to make a concerted effort to raise additional resources, including through bilateral contributions, to ensure availability of adequate concessional resources should the downside risks materialise.”
The central bank governors added: “In this context, we call on both traditional and non-traditional International Development Association (IDA) donors to increase their support to IDA17 Replenishment. We re-affirm our commitment to continue implementing sound policies and working towards achieving inclusive growth as we have done over the past decade.”
Inclusive economic growth in African countries despite high economic growth that the African countries have achieved over the last three decades has not been achieved, a development that has seen high levels of poverty persisting in the African countries.
The governors/finance ministers explained that their efforts to promote inclusive growth will require active engagement with the BWIs.
“This engagement will be enhanced when the deficiency in our representation in the IMF is addressed with the urgency it deserves. In this regard, we reiterate our call to the IMF to establish a Third Chair for SSA,” they pointed out.
The African governors of the World Bank Group and the International Monetary Fund, met in Washington D.C. last week to reflect on the ongoing and uncertain global economic developments.
The World Economic Outlook has remained fragile with the IMF cutting down global economic growth to 2.9 for 2013 down from 3.3 per cent that was earlier projected and 3.6 per cent for 2014 down from 3.8 per cent.
Obstacles to risk management
• Major causes. Lack of resources, information and knowledge, as well as biases in behaviour and factors outside of their control.