Dr Addison calls for specialized financing support for low-income countries

By Isaac AIDOO, Accra

Governor of Ghana’s Central Bank, Dr Ernest Addison has appealed to the World Bank and the International Monetary Fund (IMF) to review their lending arrangements for Low Income Countries (LICs) in order to enhance development support to those countries.

Speaking on behalf of African Governors at a meeting with the Managing Director of the IMF on the theme “Bolstering Africa’s Financing through the Overlapping Crises and Beyond,” Dr Addison noted that domestic adjustment policy efforts without adequate financing could only yield limited results, in the context of the current complex domestic and external environment.

“As such, stronger support from the development partners, including the IMF, remains paramount. Considering the low catalytic effect of Fund financing, many of our countries view the countercyclical role of Fund financing as indispensable,” Dr Addison stated.

Enhancements to G20 Common Framework

The Bank of Ghana Governor on behalf of the Governors requested for further enhancements to the G20 Common Framework while leveraging the Global Sovereign Debt Roundtable (GSDR) to promote rapid, transparent, and equitable resolution of debt as well as facilitate debt cancellation for the most vulnerable members.

He noted that, “the review of the Fund’s internal debt policies is welcome, but we stress the need to ensure that the changes are impactful and achieve their intended purpose.”

Keep all financing options on the table

The Governors stressed the need to keep all financing options on the table, including the use of the Fund’s internal resources.

“In view of the recent multiple shocks and a crisis like no other, now is the opportune time for a modest gold sale, particularly when gold prices are still favorable,” Dr Addison argued.

IMF, World Bank must align policies to benefit LICs

The Governors called for a meaningful collaboration between the IMF and the World Bank to better align their support to LICs.

“In this regard, we stress the need for coordination of the IMF’s LIC Facilities Review with the World Bank’s 21st Replenishment of the International Development Association (IDA21) efforts to support LICs in a holistic manner,” they noted.

Dr Addison pointed out to the IMF MD that the Governors viewed continued pragmatism and agility of IMF’s policies to changing global conditions as paramount to better serve its vulnerable members.

To that end, “we underline the necessity for the upcoming comprehensive review of LICs facilities to maintain the Poverty Reduction and Growth Trust’s concessionality and promote higher access to reverse erosion amplified by the global inflationary episode.”