Speech

Remarks of the Managing Director at the Open Session of the Compact With Africa Conference

August 27, 2021

Thank you very much, Chancellor Merkel. Please accept my gratitude to be part of the discussion today.

The Compact with Africa countries are a very special group. Why? Because they self-selected to be an example of how reforms can enhance performance, and before the pandemic they outperformed their peers in terms of growth. This translates into the well-being of people, and is also a shining example for others to follow.

Then, like the whole world, they were hit by COVID-19: an unprecedented crisis that requires unpreceded action.

At the IMF, from the outset of this crisis, we’ve swiftly and decisively stepped up our support with the resources we had. But we also recognized that this would be not enough for a crisis of this magnitude.

I want to thank the G20, and thank the leaders here today, who have actively supported the $650 billion Special Drawing Rights allocation – a shot in the arm for the world economy, but especially for countries in dire need.

I want to speak to the call that the leaders here have made to us at the IMF, to us as a community. It is a call that translates into the following:

First, we have to use these resources differently. After the 2009 crisis, we issued $250 billion in SDRs. 90 percent of those SDRs were used simply to boost reserves. This is necessary today, too. But we have to do more. We have to use this unique opportunity for strategic transformation of countries – transformation that is going to be driven by this crisis. And therefore, we call on you – on the leaders – to use these resources strategically, for top priorities. And, of course, self-resilience on health is a top priority.

Second, many spoke about those countries that received SDRs but are not in dire need. They can on‑lend. We are working on this relentlessly, so please do continue to press for this reallocation of SDRs. The target that the G7 set – $100 billion – is achievable.

At the IMF, we’re working on two very big objectives: one, to boost the Poverty Reduction and Growth Trust. Two, to create a new Resilience and Sustainability Trust, so we can effectively use SDRs to also help you address this other crisis: the climate crisis that is already hitting the Continent.

Let me finish by saying we should not take for granted that CO2 emissions in Africa are going to stay low. As Africa grows, as its population grows, unless there is determined, strong investment in a less carbon‑intensive development path, we will see Africa struggling to stay low in carbon emissions – in a crisis that affects Africa the most.

And finally, I want to confirm that we are there for you. When it comes to domestic reforms, President Macky Sall and I first met before the pandemic, and we talked about domestic resource mobilization. That continues to be a priority, and we will continue to support you in your very, very important work.

Thank you, Chancellor.