Mobilizing External Financing for Africa’s Crisis Recovery

The COVID-19 pandemic has taken a significant toll on African economies. On the continent, countries continue to face significant financing needs to protect lives and livelihood and bolster prospects for a stronger and more resilient economic recovery. To help meet these needs, the international community must promptly work to implement a new general allocation of IMF SDRs supplemented by a multilateral reallocation initiative. It must also work collaboratively to significantly scale up IFI financing that would be made available to eligible borrowers based on the strength of their reform and policy agenda. In particular, the IMF should play a critical role, notably by sustaining the high levels of financial assistance provided at the onset of the crisis. Similarly, the World Bank should live up to expectations by boosting IDA and IBRD lending to countries on the continent. MDBs should commit to make enhanced use of guarantees and other risk management instruments to help African countries lower borrowing and project implementation costs. Continued provision of debt relief will prove critical, including the extension of the DSSI at least through end 2021. Effective implementation of the G20 Common Framework will also greatly benefit African debt-distressed countries, should it materialize into timely debt restructurings.