Washington, DC - 28 April 2025 (ECA) - The 2025 Spring Meetings of the International Monetary Fund and the World Bank Group have been an opportunity for Africa to come face to face with the realities of a turbulent shift in the global context, with heightened policy uncertainties and macroeconomic vulnerabilities, according to Ms. Hanan Morsy, Economic Commission for Africa’s Deputy Executive Secretary and Chief Economist.
Speaking at a high-level roundtable co-hosted by OMFIF and Crown Agents, bringing together central banks, international organizations, and private sector leaders, focused on how emerging and frontier economies can address these challenges, Ms. Morsy said, “Strengthening financial resilience in today’s volatile environment demands bold, coordinated solutions across central banks, multilaterals, and the private sector.”
She highlighted several critical priorities for Africa, stressing the need to build bigger and better multilateral development banks (MDBs) that provide more guarantees to crowd-in private sector financing. In addition, she called for diversification of funding sources to lower the cost of capital and stressed the need for Africa to accelerate regional trade and the full implementation of the African Continental Free Trade Area (AfCFTA). Key to this acceleration will be streamlined cross-border payments in local currencies.
Earlier in the week, in a briefing of the ministerial Africa High-Level Working Group on the Global Financial Architecture organized by the Economic Commission for Africa, Ms. Morsy echoed a theme reverberating throughout the G20 actors at the Spring Meetings– that the global financial system “must evolve to better serve those with the greatest need.” Convened by the Economic Commission for Africa, the session focused on the sharp decline in bilateral financial flows and the vital role of multilateral development banks (MDBs) in protecting Africa’s development gains.
“The MDBs remain a critical source of stability and opportunity, especially through concessional financing,” said Ms. Morsy. She also emphasized the urgency of scaling up financing under both the International Development Association (IDA) and the International Bank for Reconstruction and Development (IBRD), and deepening reforms to better support vulnerable countries.
Ms Morsy briefed the Ministers on recent IMF policy developments, lauding the institution for its focus on sharpening the Resilience and Sustainability Trust (RST) that is aimed at anchoring reforms and unlocking climate and pandemic finance. She also noted that the IMF had maintained higher access limits under the General Resources Account (GRA) and made important updates to the Arrears Policy that is, “better suited for today’s complex debt landscape.”
Nevertheless, she urged for deeper reforms, including securing the long-term sustainability of the Poverty Reduction and Growth Trust (PRGT), IMF concessional window; Reducing surcharge burdens on African economies; Deepening RSF’s catalytic role to mobilize additional finance and attract private investment, including operationalizing health financing and increasing access flexibility for high-need countries. Furthermore, she called for reforming the quota and SDR systems to deliver more to countries most in need.
Ms. Morsy welcomed the World Bank’s progress on the IDA21 replenishment, which has the potential to unlock $100B and the Bank’s Mission 300, which has already secured $50B in pledges for Africa’s energy access. In addition, she lauded its expansion of the Climate Resilient Debt Clauses (CRDCs) with a scope of covering all disasters and its rollout of diversified products and programmatic responses under the guarantee platform.
“But we must go further,” urged the Chief Economist, stressing the need to scale up IDA and IBRD financing through risk-sharing and balance sheet innovation; deepening MDB collaboration and de-risking tools to crowd in private investment and mainstreaming the Climate Resilient Debt Clauses to enhance resilience across debt portfolios.
She stressed the importance of using the upcoming key opportunities to continue shaping a more inclusive, development-aligned financial system, such as the ongoing G20 convenings by South Africa, the UN Tax Convention process and the Fourth Financing for Development to be held in Seville, Spain from 30 June to 3 July, to assess the progress made and identify obstacles in the achievement of the Sustainable Development Goals (SDGs), as well as to support the reform of the international financial architecture.
Ms. Morsy, who is a member of the Africa Expert Panel under South Africa’s G20 Presidency participated in a strategic discussion on amplifying Africa’s voice at the G20. “With African countries projected to spend nearly $89 billion on external debt service this year — more than many spend on health or education — the urgency of global financial reform could not be clearer,” she said stressing, “This is not a moment for incrementalism — it’s a moment for transformative, coordinated solutions.”
The panel aims to deliver a “bold and actionable” set of recommendations to G20 Heads of State, focusing on the cost of capital and Africa’s growth and development.
At an event co-organised by the African Union, ECA, African Tax Administration Forum (ATAF), and Tax Justice Network Africa (TJNA) to the discuss the “Update on the Progress towards the United Nations Framework Convention on International Tax Cooperation: Challenges and Opportunities”, Ms. Morsy stressed that African countries must seize the opportunity to ensure successful outcomes of the UN Tax Convention, develop modern and robust tax system, and close loopholes in the context of external funding squeeze.
“It’s critical to build a strong alliance with the Global South”, said Ms. Morsy, urging better coordination, strategies, and enhanced capacity of African countries in the negotiation process, with evidence-based analytics to inform the experts and negotiators. In addition, she called for higher transparency in tax administration as well as information sharing among countries. She also stressed the need for the use of technology and digital tools, reviewing inefficient incentives, and more peer-learning on best practices of domestic resource mobilization.
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