Press Release No. 05/59

Press Release: IMF Co-Sponsoring Seminar on Foreign Aid and Macroeconomic Management in Africa March 14-15, 2005, Maputo, Mozambique

March 11, 2005

The following statement was issued today by Mr. Abdoulaye Bio Tchané, Director of the International Monetary Fund's Africa Department, in advance of an upcoming seminar on foreign aid and macroeconomic management in Africa:

"Making significant progress toward the achievement of the Millennium Development Goals (MDGs) remains a major focus of the international community, and larger and more effective aid flows will be a critical component in reaching the MDGs. There is consensus on the objectives of aid, most notably the urgency of reducing poverty. However, for both donors and macroeconomic policymakers in the aid-receiving countries these objectives raise a number of critical questions on the macroeconomic management of aid."

"The issues of maximizing the effective absorption of foreign aid and avoiding macroeconomic hazards will be examined at a high-level seminar on March 14-15 in Maputo. The seminar will bring together senior government officials from a number of African countries, and representatives from the IMF and the World Bank, key development partners, and academics. Participants will review and exchange experiences, identify challenges, and derive lessons going forward. The seminar is sponsored by the African Department and Institute of the IMF, with co-financing from Germany's Internationale Weiterbildung und Entwicklung (InWEnt), and the UK's Department for International Development (DFID).

"Seminar speakers will address critical questions, including:

• How can the effective absorption of aid be increased?

• What are the short- and medium-term implications for the allocation of aid, and how can we ensure that these are largely positive or benign?

• Does aid reduce or exacerbate volatility and how can we influence this?

• How does aid interact with institutions and the political economy?

• In what circumstances can concessional lending lead to debt problems and what considerations should govern the grants-versus-loans decision?

"This seminar is an important opportunity for the members of the aid, academic and official communities to share information and experiences in a critical area of economic management. It is also part of the ongoing efforts of the IMF to explore the views of key players in the formation of public policies in Africa," Mr. Bio Tchané stated.

For more information on the seminar, including its agenda, background documents and other supporting papers, please visit:

http://www.imf.org/external/np/seminars/eng/2005/famm/index.htm