Africa: Remarks By IMF Managing Director Kristalina Georgieva During an Extraordinary Conference Call of G20 Finance Ministers and Central Bank Governors

A resident of Mamelodi in South Africa during the COVID-19 lockdown.
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Washington, DC — International Monetary Fund (IMF) Managing Director Kristalina Georgieva made the following remarks today during an extraordinary conference call of G20 Finance Ministers and Central Bank Governors:

"Thank you to the Saudi G20 presidency for calling this extraordinary meeting.

Outlook

"We welcome the decisive actions many of you have taken to shield people and the economy from COVID-19, that led to a decline in volatility in major financial markets in recent days. Nonetheless we remain very concerned about the negative outlook for global growth in 2020 and in particular about the strain a downturn would have on emerging markets and low-income countries.

"Our forecast of a recovery next year hinges on how we manage to contain the virus and reduce the level of uncertainty.

"Thus, we support an ambitious G20 action plan to strengthen the capacity of health systems to cope with the epidemic; to stabilize the world economy through timely, targeted and coordinated measures; and to pave the way towards recovery.

IMF reforms

"And we will do our part. In fact, we got a strong mandate last Friday from our governing body, the International Monetary and Financial Committee (IMFC), on reforms to strengthen our crisis response.

In particular, it endorsed initiatives to:

Enhance access to our emergency facilities, as now some 85 countries indicate they rely on them for financial support;

Build up our capacity to serve our poorest members; and

Help countries experiencing foreign exchange shortages, including possibly by short-term liquidity line.

"We also have good news on IMF resources.

"The U.S. recently approved the doubling of the New Arrangements to Borrow, and our Executive Board yesterday agreed on a new round of bilateral borrowing to secure the IMF's $1 trillion lending capacity.

Debt relief

"Lastly, I would like to direct your attention to the issue of debt of low-income countries.

"Starting with their debt obligations to the IMF, I am pleased to report that our Executive Board last Thursday approved a reform of the Catastrophe Containment and Relief Trust (CCRT) that allows our poorest member countries to invest in crisis response rather than repay the Fund. I want to thank G20 members who have pledged financial support for the CCRT and call on others to join.

"And I support the G20 to urgently work on further easing the debt burden of our poorest members.

"At a time the world economy is at a standstill, official bilateral creditors could make a major contribution by offering a debt standstill to IDA-eligible countries, as World Bank Group President David Malpass and I proposed during our last meeting.

"It will also be important for other creditors to do their part, and I count on the G20 to help build consensus on a way forward for our poorest members."

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