Transcript

Transcript of a Press Conference on the IMF's Sub-Saharan Africa Regional Economic Outlook, by Antoinette Sayeh, Director African Department, IMF

April 25, 2009

Webcast of the press briefing

MR. DIENG: Good morning, everyone. Welcome to the Regional Economic Outlook for Sub-Saharan Africa Press Briefing. Joining us today, Mrs. Antoinette Sayeh, Director of the IMF’s African Department. To her right, Mr. Mark Plant, Deputy Director of the Department and Mr. Saul Lizondo, also a Deputy Director.

Mrs. Sayeh will have a few opening remarks and then we'll take questions.

Mrs. Sayeh?

MRS. SAYEH: Thank you very much. Good morning, everyone, and welcome again. It's a pleasure to be here this morning to share with you our regional economic outlook for Africa. I'm, of course, joined by my colleagues and we'll be happy to take questions after I give you an overview of the regional economic outlook.

It won't be a surprise to you, of course, to hear that we see the prospects for Africa significantly worse than they looked six months ago when we were last here back in October, as a result of what's happening in the rest of the world and the impact of the crisis on the region.

Africa, depending on what countries you're talking about and the nature of the economy involved, has been affected somewhat differently. But the crisis is now in full force in Africa as a result of the significant slowdown in demand in the rest of the world, the huge decline in demand for African exports.

Demand for those exports has weakened and the prices for most commodity exports have fallen. Tighter global credit and investor risk aversion have led to a reversal of portfolio inflows and are discouraging foreign investment. They have also made trade finance more costly.

Also, remittances may be weakening. The data doesn’t necessarily provide a firm conclusion on remittances, but they're significant in some African countries and there's some evidence that they're declining.

Sub-Saharan African growth in 2009, therefore, is projected at only some 1.5 percent, a drop of almost 4 percentage points from 2008. Growth is expected to recover in 2010 to under 4 percent, which is still below its pre-crisis levels.

Fiscal and external positions are now expected to weaken substantially through 2010, with oil and other commodity exporters being particularly hard hit. So, risks remain and they're mostly on the downside given the big uncertainties on the global outlook.

So, these are, therefore, very challenging times for Africa. And I suggest that we focus on three issues in the rest of the time we have. And let me try to address them before taking your questions.

First, what policies are needed to cushion the impact of the crisis on Africa. What can the international community do to help? And third, how--how does a fund support African efforts in these difficult times?

As I was saying before, of course African countries differ in their economic challenges, and the appropriate policy response and so, therefore, have to be country-specific.

But the priority for all African countries, given the achievements of the past decade, has to be to contain the adverse impact of the crisis on growth and poverty while preserving the gains of recent years with Africa having grown quite robustly over the past decade. What has to be preserved, also, is debt sustainability, which has been a key feature of the past decade or so, progress on debt sustainability.

Pressures to respond, we think, to weakening balance of payments positions in African countries with protectionist measures or to revert to administrative controls really do, therefore, need to be resistant. Because, of course, of the history of protectionism in the past and the cost associated with those actions. And we would therefore suggest that economic policy for African countries in the months ahead should be guided by three general principles.

The first one is, as we're saying to other countries--advanced countries, emerging market countries, we also say the same to Sub-Saharan African countries, that is to use the available fiscal space they have to mitigate the impact of the crisis on their economies.

So, the global financial crisis will have and is already having in some African countries a significant impact in reducing government revenues. Now, with the increase in the fiscal deficit that results from that can be financed, countries that have achieved macroeconomic stability and sustainable debt levels should, indeed, maintain their planned spending.

There are a few countries in Africa, we think, that also have scope for some discretionary fiscal stimulus, so adding spending over and beyond what was previously budgeted and stimulus in the form, for example, of additional social measures to protect the poor in this period of time. There are a few countries who can perhaps afford that. Commodity exporters that have accumulated savings, for example, during the oil price boom last year may be able to adjust gradually by drawing down on some of their reserves. And some countries are indeed doing that.

In countries with limited or no fiscal space, however, there may be no alternative to tightening fiscal policies in the near term. Additional donor support, of course, will help to ease the adjustment. And that's the context in which we've been urging donors to respect their commitments already made some years ago to double aid to Africa. And the poorest countries in particular, at this point in time, really need that support to help them adjust in an orderly manner to a crisis not at all of their own making.

But adjust--all countries have to, one way or another. And the point is to make that adjustment orderly and not disruptive of growth. And that's the role of financing. And the international community must therefore play its role.

The second principle that we think African countries need to pursue is to ease monetary policy where possible and let the exchange rates adjust to the new external environment. The plunge in commodity prices has already disinflationary. In a number of countries, prices are coming down. And in that context, it will be possible in some countries to ease monetary policy. Indeed, we've seen that happen in a few countries already, interest rates coming down and Central Banks responding to the opportunities to mitigate the impact of the crisis through monetary policy actions.

But there, where there are terms of trade deterioration, though, and capital flows are drying up, clearly real exchange rates will have to adjust and to depreciate. So, it's important that African countries do indeed--those countries that have flexible exchange rates allow those exchange rates to adjust and to help in the process of preserving their competitiveness, also, to the extent possible through this crisis.

The third principle: we think it's important is to really closely monitor financial sector vulnerabilities and be prepared to act promptly in the event of deterioration in the financial sector.

As shown in the Chapter 2 of the Regional Economic Outlook, the impact on Sub-Saharan Africa's financial systems has been fairly limited, so far. But the economic slowdown and, of course, exchange rate volatility in some countries are likely, we think, to increase credit risk and non-performing assets and weaken, therefore, the balance sheets of financial institutions and corporations. So countries have to be prepared to respond to that eventuality.

Priorities may need to be reordered to adjust to these circumstances. And Central Banks and governments may need to look at emphasizing more short-term measures, such as intensifying their surveillance of the financial sector institution to be able to detect deterioration early and to be fully aware of the risk to the financial sector. But we think these short-term priorities should still not distract governments from what are medium-term challenges in the financial sector and the need to work to strengthen financial intermediation, and to diversify the financial systems to deepen them.

And let me now turn, finally, to what the international community, including the IMF, can do to help African countries as they put in place these policy responses that I've just described.

Of course, to carry forth the momentum of the past decade, in this very adverse environment, Africa will need additional aid resources. African countries will certainly need at least a doubling of aid promised by the G8 Heads of state at the Gleneagles Summit in 2005. We're aware, of course, that donor countries are under significant pressure, fiscal pressures of their own in light of the crisis. But, of course, aid commitments including those made to Africa, are a very small share of the budgets of advanced countries, and it is, therefore, possible to still honor those commitments.

Without additional donor support, the risk is that a lot of what has been achieved in Africa, is lost in the months ahead. And it would certainly be a very, very bad outcome for the world economy and for African countries, of course, if Africa sees reversion to previous impact of--returning, perhaps, to bad policies, in response to social pressures and populist pressures when financing is not forthcoming to help do the right thing. So, we really think it's important that the international community be there to help.

There are social pressures and possibly political pressures in countries down the road that may be significantly adverse if progress is not made to mitigate the impact of the crisis on the poorest.

So how does the fund itself help? We think we're doing our part. As you know, beginning last year with the food and fuel crisis, we have significantly increased our resources for Sub-Saharan Africa. We've done the same in light of the current crisis. Five countries already have benefited from the Exogenous Shocks Facility. Coming out of the discussion we have with our African member countries in Tanzania and then out of the G20 meeting, of course, significant progress on the issue of making additional concessional resources available to support African countries.

We've been able to modify the fiscal targets in the large majority of African countries that have programs with the Fund, some 80 percent of those countries having larger fiscal deficits this year to accommodate the impact of the crisis.

And earlier this week, our Board approved a doubling of the access limits, the envelopes that countries can benefit from under the Poverty Reduction and Growth Facility, as well as the Exogenous Shocks Facility, the two main instruments we've been using to support Africa. Those access limits doubled earlier this week, therefore, will allow countries to benefit from more financing than would otherwise be possible.

We are also revising our lending instruments to reflect the very diverse needs of African member countries to be more flexible to deal with the issue of conditionality. There's been also a decision earlier this month to reform structural conditionality in IMF programs. Those, we think, are very welcome for our countries.

And, of course, I think as all of you know, Sub-Saharan Africa stands to benefit, as do other member countries of the Fund, from the distribution of special drawing rights that has been also recommended by the G20. Still, discussion is needed at the IMF Board and agreement in the membership down the road, but once that decision is taken, Africa stands to benefit significantly from the SDR allocation.

Beyond financing, we will continue, of course, to provide the very extensive policy advice and technical assistance that is a big part of our partnership with Africa. At a time like this in particular, it's particularly important that we are responsive, providing on the ground, quick turnaround policy advice where requested and necessary. And in that context, we're seeking to add to our regional technical assistance centers in Africa to be able to respond quickly.

So, those are the things we're doing. I very much welcome the discussion that we'll have, and now want to take your questions. We will, myself and my colleagues, be happy to respond.

Thank you.

QUESTIONER: How would you suggest that countries strike a balance between borrowing more money and being dragged into fresh debt? Because that's a huge problem that has affected Africa in the last, say, 20 years.

Secondly, you suggested there should be an increase in aid. There's a school of thought that says that actually aid should be cut to make African governments more responsive or more judicious in using their resources. What's your comment on that?

MS. SAYEH: Well, it's important to preserve the hard-won gains of the past decade or so in Africa, among which we count progress towards debt sustainability in a large number of African countries as a consequence of the HIPC Initiative. So, many African countries now are not at risk of debt distress, which was the case for most countries some time ago. So, clearly additional financing provided at this time for Africa and for the poorest countries needs to be on concessional terms and where possible on highly concessional terms. And the international community, to the extent possible, should be providing grant financing for the poorest and the countries at most risk of debt distress. And those are largely the post-conflict, fragile countries, countries emerging from conflict.

The Fund, of course, is seeking to provide additional financing. It will be in the context of attention to debt sustainability. We will need to conduct updated debt sustainability assessments on the basis of which we propose any doubling of assistance.

The poorest African countries need grants. That's where the bilateral donors come in. Bilateral donors have the capacity to provide additional grants, we think, to Africa than they've been doing. And that should be part of the response to the crisis.

African countries do have a challenge. Those countries at most risk of debt distress and the poorest countries sometimes don't have those grant resources available in the timeframe in which they need to reinvest in infrastructure and basic social services that will sustain the peace. And that's the challenge, you know, to what extent should we be taking a second look at the debt sustainability framework to make sure it's flexible enough? We are doing that. That's been a big part of the conversation with our member countries. And we, in fact, have a discussion with them this Sunday to look in more detail at this issue of reviewing the debt limits and fund programs in support of financing high priority investments.

That brings me to this issue of aid and the suggestion by some people that it makes sense to cut aid. I guess the rationale there being that it somehow forces African countries, therefore, to rely more on their own resources. It's certainly our view that more progress can be made in many African countries in expanding domestic resources for investment and development. And that's why we emphasize tax policy and tax administration reforms in many fund-supported programs to help countries increase their own domestic capacity to finance their priority spending.

But it is the case that aid will be necessary to fill in what are real gaps in the poorest countries' ability to finance their investments. And aid has been shown to have a very positive impact on growth and poverty reduction in Africa.

We, therefore, think it's actually dangerous to suggest, as has been suggested by some, that the appropriate response to Africa's problems at this very difficult time is to further deprive AIDS patients and young people who've been out of school for a decade because of a civil war, to deprive them of access to education and health and resources to deal with an epidemic, for example, like AIDS. And to deprive African productive sectors of the ability to export and by depriving investments in import infrastructure, we think it's irresponsible, frankly, to suggest that response.

Thank you.

QUESTIONER: Taking from the last question with regards to aid, I think your statement that there has been some positive measures towards aid is highly debatable when you look at what has happened in Africa for the last 20 years in terms of aid. And also, talking about the issue of African government domestic policies. I think you'll agree with me that for many years what the Western parts are doing now in terms of their policies in individual government is what IMF used to tell the African government not to do. So, I'm beginning to wonder what the IMF is going to do now in terms of directing the policies in Africa.

And I also notice that for many years when IMF, World Bank, and all these other international organizations talk about growth and poverty they tend to avoid the issue of trade within Africa. Can you help me there, please? What are IMF and the World Bank doing in terms of overcoming trade barriers within the African continent?

MS. SAYEH: Let me start by saying it's not only on the basis of the empirical research that has been done. I mean, there are tons of research that has demonstrated the effectiveness of aid and we can make some of that research available to you if you're interested.

One can also just listen to the perspective of African leaders who see a very useful road for aid. We've heard from those leaders about how they see aid helping them. Clearly there are challenges in reforming and aligning aid to government priorities. There's been some progress on that. There still needs to be additional progress. But one can listen to Ellen Johnson-Sirleaf and she had an editorial the other day you might have seen in the Washington Post talking about the importance of aid.

You don't have to believe me; believe the research and believe and listen to those who are managing African economies and the challenges they're facing and what they think they need. I think that should inform our own conclusions on what are difficult issues but clearly ones around which people can have differences of opinions. But that opinion and that discussion should be informed by the hard facts. And there are plenty of hard facts we think to suggest that any increase in aid at this point in time is what Africa needs.

Your second point was about trade, and I'll start and maybe one of my colleagues might want to also add to this. But trade is a very important part of what African countries have to pay attention to. And improving competitiveness to be able to benefit from the opportunities in the international economy explains part of the progress we've seen also in Africa in the past decades. From a situation in which many African countries had overvalued exchange rates and, therefore, discouraging exports, we see a very different situation today.

The Fund has been very happy to engage with countries on the macroeconomic issues that they need to address to promote trade. The fact that we're seeing African countries so adversely impacted by the crisis demonstrates the extent to which they have been integrated into the international economy through trade because the largest impact we're seeing, of course, is because there's been such a contraction of demand for African exports. So, African countries are being successful in using trade.

We've been very vocal at the Fund about the need to conclude the Doha Round where African exporters stand to benefit. Cotton exporters, for example. And we continue to think that an early conclusion to the Doha Round will be in Africa's interest.

Would you like to add to that?

MR. PLANT: Let me talk a bit about trade within Africa because although we tend to think of trade with the rest of the world, within Africa trade is extremely important for the development of Africa and clearly one area where more progress needs to be made.

Regional integration is one way to start to begin to accomplish that trade. We've supported regional integration in the west of Africa and the east of Africa and the south of Africa. There are many trade groups within Africa. There needs to be some rationalization of those trade groups, and we're working with the countries to make more sense of that.

And I think another area that's extremely important is the development of African infrastructure for trade. And I think of a very specific example. Last year in Togo there were floods which essentially wiped out a major bridge that allowed the Port of Lome to connect to the region. And that really put the brake on trade in the region. And there you see the link, if you will, between aid and trade because Togo is a poor country. It didn't have the means to rebuild that bridge in short order and had to turn to its international partners. And it's in that type of experience--or that type of experience where the international community can be very helpful in giving aid to encourage the types of infrastructure and emergency response that really will develop the intra-African trade.

QUESTIONER:I have a question in two parts. The first part has to do with the conference in Dar ES Salaam where the Ministers of Finance wanted to get greater non concessional resources so that they can promote investments. What is the evolution of the situation when it comes to that?

Secondly, many African countries coming out of crises have reached the point of completion of the HIPC initiative. A lot of countries, like Côte d'Ivoire, are very indebted and are having negotiations with the Paris Club and others. What is the IMF doing so that they can face up with the current situation?

MS. SAYEH: The call in Dar es Salaam for the doubling of concessional resources was, you know, part of the joint commitments we made there. And the Managing Director was able to very quickly take that request forward at the G20 meeting in London earlier this month whereas, you know, the communiqué also supported not just a doubling for essentially a tripling of IMF concessional resources.

Now, those details are being worked on. There was a discussion at the IMF Board just earlier this week on the financing of that tripling of concessional resources. After the Spring Meetings there'll be a further discussion of how to take that forward. In the interim, as I said in my opening remarks, we have had the Board approve a doubling of access limits under existing facilities so that African countries can take advantage of the financing, the concessional financing, that is already available. And we believe that there are adequate concessional resources even with that doubling for what we expect to be the financing needs of African countries over the next couple of years.

So, I think we already have an opportunity to do more with more concessional resources. We're pleased by the progress made in the discussion of the further increase in concessional resources that will be needed in the medium term.

On debt relief, we're also pleased that among the remaining countries seeking to reach the decision point under the HIPC initiative, Côte d'Ivoire has been able to make progress towards that end. And, there has reached the decision point under the HIPC initiative. It will be the case that Côte d'Ivoire will need to meet the remaining agreed criteria set in the context of the completion point which we hope can come as soon as possible in Côte d'Ivoire. It will require, of course, pursuing the reform program that is underway there.

We're encouraged by the commitment in that regard that we've seen and heard from the Ivorian authorities. There will be elections in Côte d'Ivoire hopefully later this year, potentially early next year. We think that the broad commitment to reform and commitment to getting debt relief as soon as possible is a shared objective of various political parties in Côte d'Ivoire, so we expect that there will continue to be progress on the reform program there.

We very much want to do as much as possible to bring the remaining countries that stand to benefit from debt relief to the completion point as quickly as possible. And in that regard, Togo, Liberia, some of the more recent decision point cases are making considerable progress and we'll continue to support them in that regard.

MR. DIENG: Here in the second row.

QUESTIONER: Hi, Miriam Seliba [ph.] from the Middle East Broadcast Network.

My question is how are you monitoring that the financial aids are going to the right hands, to the right place? First. And second, I want to talk specifically about Sudan and the situation over there. The political situation and how is it affecting your work there.

Thank you.

MS. SAYEH: On Sudan I would suggest--unfortunately, I'm not the best person to talk to on Sudan because my remit is Sub-Sahara and Africa, excluding Sudan, Somalia, and the North African countries. I really don't know very much about what's happening in Sudan. My colleague, Masood Ahmed, and his team would be happy, I think, to engage on that--on Sudan.

In terms of monitoring how resources and whether resources get to their intended purpose, of course, the main role that the Fund can play in that is to help countries strengthen their public financial management systems. And that's a big part of the technical assistance we provide to countries--is to strengthen the budgetary formulation implementation process. And we invest significant resources in that. Of course, as a shared area of responsibility with the World Bank, so together with the World Bank and other partners, in particular the European Union that is quite significantly involved, we help countries strengthen the public financial management systems to ensure that they're able to channel their resources appropriately.

There are a large number of donors, of course, that are involved in the broader issues around governance and the fight against corruption in many developing countries utilizing their own areas of expertise, but in our case it's fundamentally through this focus on public financial management--a big part of many programs.

QUESTIONER: I think we're all a little puzzled about what happened in the G20 out of the doubling of IMF resources. And what I'm trying to get at is what Africa is going to get out of this. You're talking about the tripling of concessional resources. If we set that against the bigger picture, which is that the G8 countries are at least $20 billion behind their commitments made in 2005 to double aid to the poorest countries by 2010, then we look at the situation of infrastructure financing in Africa. And the best assessments back in 2005 was that Africa would need 80 billion extra a year. It started off after 2005, I think it got 5 and 10 billion, and then with the increased private sector flows it went up to 20. And now we're looking at a very, very barren year this year and perhaps a more barren year next year as well, where infrastructure funding is going to go back. And now you're saying that the best guess on African growth forecasts are under 2 percent from what was hoped for last year as being over 5.

Is there any sense of an overall sense of the financing gap in Africa? Just how much are the countries of sub-Saharan Africa losing out and setting that against what's really being promised so we can work out, you know, how bad it really is?

MR. LIZONDO: It is true that in terms of donor commitments they're still well below what was promised to reach for next year. But in any case, what's coming out from the G20 is still significant resources for Africa that we think are going to have a positive impact on growth, and this is going to be very important for the region.

About the growth numbers that you mentioned, the growth of 1.5 for this year is not a direct consequence of the lack of donor support for this year; it's a consequence of the crisis. So we think that with additional support from the Fund and also from donors--and we are stressing the importance of donors actually fulfilling their commitments--we think that we can cover most of the financing needs to , support growth in the countries, particularly the infrastructure and also for needed social spending.

At this moment we don't have a specific number about what is the gap at this moment, and this is something that we're working with our country teams.

QUESTIONER: But you'll be able to produce a continental figure?

MR. LIZONDO: We are working on that.

QUESTIONER: The gap in Africa?

MR. LIZONDO: Yes.

QUESTIONER: Okay, thanks.

QUESTIONER: This global financial meltdown has been so extreme and it's hitting Africa hard. I mean, everywhere you go to Africa you can see it. Commodity prices have fallen; foreign direct investments are drying up. Do you see all these leading to a point whereby some African countries are already sliding into recession, and which countries maybe you would say are in that situation?

MS. SAYEH: Just in terms of the technical definition of recession, I guess, would mean two consecutive quarters of negative growth. Unfortunately, we don't have quarterly figures in many African countries to know within the last four or five months how the quarterly numbers on growth stack up.

What we do see going forward, and that's the basis of our projections, is that many African countries will have a decline in growth this year relative to how they did last year and what was previously projected for this year. But, you know, speaking of recession per se, it's not necessarily the case. The growth may be less than we had projected, but there are quite a few African countries that will grow at what may be perceived by some as a relatively robust level: 4 or 5 percent. But given where they have been and how they've been growing and given the challenges ahead, they need to grow a lot more than 4 or 5 percent. So in that sense you may look at it as a recession. But technically, a number of African countries are still growing.

There are others, though--Botswana is one of them, for example--that stand to do very badly this year as a result of what's happening in the diamond sector. We project some 10 percent decline, negative growth this year, which is a very serious thing indeed. So there are some countries that will not grow this year with very serious potential consequences that worry us a lot.

QUESTIONER: In the midst of all this crisis, have you worked out the crisis in countries like Zimbabwe, the kind of impact they are having on the neighboring countries in that region?

MS. SAYEH: In Zimbabwe specifically, there are some encouraging developments, as you know, coming out of the agreement earlier this year to put in place a coalition government. We've just actually had a mission to Zimbabwe. The report on that mission will be discussed by our board on May 4th. And of course, there was a collapse in the Zimbabwean economy and a crisis--social developments of crisis proportions last year with cholera epidemic and all of the other social consequences of many years of economic collapse.

The actions taken recently by the Coalition, by the government in Zimbabwe, are encouraging. We think hyperinflation has been stopped by the decision to use the rand and the U.S. dollar--to recognize the use of those currencies because those currencies have become quite widespread in Zimbabwe. And the formal recognition and formal decision to dollarize, as we call it--to use external currency as domestic currency--has helped to put a stop to the quasi-fiscal deficit. And so the Central Bank's ability to just finance and print money to finance expenditures outside of the budget which have been a large source of the hyperinflation in Zimbabwe, that's now at an end, we think, which is a good thing. And that's already resulted in a decline in prices in Zimbabwe. More availability of goods in country, and we are certainly encouraged by that.

So, in the very recent past developments in Zimbabwe have been broadly positive. Of course, the past deterioration in that country's economy and the exit of many, many Zimbabweans to the countries in the region has been significant. So in that sense previous developments in Zimbabwe have had a huge regional impact in terms of refugees in other countries. And as things improve in Zimbabwe, of course we'll see some of those refugees return. And it's the context in which we think there's a window of opportunity in Zimbabwe that is worthy of support by the international community. We, for our part, are hoping to help in the ways we can currently, and those are mostly through policy advice, our Article IV discussion with the authorities was one form. We're hoping to do some small, technical assistance in the key areas of the Fund's mandate, and we encourage others to do the same. And we'll work with the Zimbabwean authorities to continue to make progress on the reform effort.

QUESTIONER: I have two concerns. African countries, like the Democratic Republic of Congo, must stabilize their economy, but they also have to have infrastructures for development. Do you think that the grants are sufficient to fund infrastructure? And during the G20 meeting it was decided to triple the resources of the IMF. I'd like to know to what extent that decision is going to modify the policies of the IMF, vis-à-vis, Africa.

MS. SAYEH: I was trying to suggest before that there is indeed a big financing challenge for Africa because for the poorest countries we want grants to be the source of financing for their large infrastructure needs. The grants have not been forthcoming in the magnitude needed to finance those needs. It is important that we continue to make the case to have those grants provided. But it is also possible for African countries to benefit from highly concessional loans. The African Development Bank, the World Bank, and others, and some bilateral partners are making those available as well. But the volume of grants currently are certainly not enough to meet Africa's financing needs in infrastructure.

In terms of the G20 and the tripling of resources, as I said, we have followed up very quickly here at the Fund in discussing with our board the details of that. Some of what will be necessary will be to find subsidy resources to allow us to expand our concessional lending capacity because African countries, most of them, benefit from the Fund's concessional resources which can only be made available to the extent that we have subsidy resources to make our general resources more affordable. And that's a separate fundraising effort, if you will, on concessional--on subsidy resources looking internally to what extent the Fund itself can contribute to that. The discussion around gold sales, which will take some time, is part of getting enough in our subsidy account to make it possible to lend that volume of concessional resources.

In terms of what it will mean for the relationship with Africa, I talked about some of the things we were doing to address conditionality; to make conditionality more focused on the Fund's core areas of responsibility and not to try to do everything in the context of Fund programs but to focus on those things that we can really help with and that are critical to making progress in particular countries. Public financial management reform, banking sector supervision, exchange rates, macro policy generally, those are the areas that we ought to be focusing conditionality on. I also talked about the fact that we will no longer be including structural performance criteria in the Fund programs. That was a source of quite a bit of discussion with African countries in the past, the intrusiveness of conditionality of that sort. And so that we've also worked to address.

MR. DIENG: We'll just take two more questions. One here.

QUESTIONER: My question will be regarding the fast track of the help the IMF will be providing to the West African poorest nations, as mine, Mali. We have lost our Finance Minister. He lost his job to the mining sector because he has said on national television that the crisis did not have a direct impact in Mali, which is one of the poorest countries in the world. So he ended up to lose his job. So how can the Fund, or you here helping African nations, can go faster to help those nations who are still struggling economically? And the gold of Mali, because you just mentioned gold, Malians are not seeing the impact of Mali gold in our economic sector. We don't see it. If you could comment on that. Because the Fund used to be the (inaudible) maker in Africa. And now that we are under this crisis, can you help the Fund to act faster so it will have some impact in our economics so there will be normal political stability in our area of Africa?

MS. SAYEH: We are indeed acting as quickly as possible. You can always act maybe quicker but we think we're trying to be responsive and we have indeed been very responsive to requests for assistance to deal with the crisis. I made reference to a number of African countries that have benefited from this new Exogenous Shock Facility, as we call it. It was a previous facility that had not been used before that we reformed precisely to make it possible for countries to get resources much faster than they would. And so a country can benefit from up to 25 percent of its quota in resources under that facility with no prior conditionality whatsoever. It can send a letter to us, make a commitment to pursue policies that will address the shock, and we quickly field the mission and can quickly bring a program to the Board and make those resources available. So I think we're certainly trying to be as nimble and as fast as we can in supporting African countries through this difficult time.

But, of course, the Fund is only one source of financing and a source of financing to deal with particularly short-term balance of payments, pressures, and needs. What Africa also needs is a large number of long-term development finance, and that's where institutions like the World Bank, the African Development Bank, and the large donor community comes in. There needs to be, of course, an acceleration of development assistance, an increase in development assistance to address Africa's need.

MR. DIENG: Thank you. We will take just one more question.

QUESTIONER: You said at the outset that there were some countries, a few countries, that had scope for fiscal stimulus. I wonder, do you identify any of those in the regional report or can you name them?

MR. LIZONDO: I don't think that we identified them in the publication. But in principle there are a few countries in which--that have low level of debt and possibility of getting financing in which a macroeconomic situation allowed them to have some stimulus packages. And I would say one case is, for example, Tanzania in which the program is allowing for a widening of the fiscal deficit for this year and also for next year. Uganda, I would say is another case in which there is space for additional spending. And even in countries in which we don't have a program, like South Africa, there is a fiscal stimulus in a situation like this. And we think that's appropriate given the circumstances.

MR. DIENG: Thank you very much. So this is the end of the press conference. I just remind you that we have copies of the report and the release available in the press briefing room. Thank you for your attendance.