Kristalina Georgieva, managing director of the International Monetary Fund (IMF), spoke to DW during the Hamburg Sustainability Conference. The IMF chief said it was high time that Africa got its seat at the global financial and lending institution.

 

DW: Many African nations are facing unsustainable levels of debt, exacerbated by borrowing for infrastructure and the pandemic. How is the IMF addressing Africa's growing debt crisis? 

Kristalina Georgieva: We work very closely with African countries in three ways. The first one is to be a source of liquidity and reserves for them. We have provided special drawing rights allocation, which does not add to that. It adds to reserves and liquidity and we also provided financing on exceptionally high scale during the [COVID-19] pandemic to help countries deal with pressing needs — 16 times higher lending than in normal times. 

Second, we work with countries to identify when debt is not sustainable and promote the restructuring through the common framework as well as in the discussions of the Global Sovereign Roundtable (GSDR). So far, we have had Chad, Ghana, Zambia, and now Ethiopia, benefiting from debt restructuring. 

And three, we are the only institution that actually provided debt relief during COVID, about $1 billion to the poorest 29 members, the majority of them in Africa. But let me say this, our biggest role to help Africa is to support Africa to grow. So, growth is the best way to beat that. 

Speaking about Africa's growth, sub-Saharan Africa has, in the past, been underrepresented in international organizations. Are there plans to give it a bigger role in the governance of the IMF? 

Yes. Absolutely. On November 1, we [ the IMF] will add one more board member from sub-Saharan Africa to our governing body and our Board of directors. And so we're doing that exactly because we believe that Africa deserves to be represented more fairly. We also look around to hire highly qualified African professionals. And especially women, they are fantastic in our troops. 

Do you want to break the news here on Deutsche Welle, who is this member who's going to be on the IMF board? 

The membership had two chairs for sub-Saharan Africa, and then they organized their countries into three new constituencies. We will announce the results of the voting when it is concluded.

IMF programs often emphasize fiscal tightening, which can restrict governments' ability to invest in infrastructure and social services. How does the IMF ensure that its policies in Africa balance fiscal discipline with the need for growth, job creation and poverty reduction? 

We pay very close attention to the fiscal conditions in our member states. Why? Because fiscal stability, financial stability is a prerequisite for countries to do well, but when we do that, we always look at the right balance between meeting the pressing needs of today against the budget constraints and the fiscal sustainability of a medium term.

So in each of our countries, we look at these trade-offs very carefully. When we make decisions, they are well-informed decisions. They are owned by our members. I was very pleased to hear one of the prime ministers from Africa say the following: "We thought of the IMF as this very strict policeman. Now we think of the IMF as a partner." 

Together, we put a path for developmentthat is more sustainable, and I want to emphasize again that our main objective is stability, not for stability's sake but as a precondition for growth and development. 

The IMF has been a strong pillar for many African countries. What last parting word do you have for them today? 

I think Africa holds tremendous potential for the people in Africa and for the whole world. We have a youthful population; we have tremendous talent of men and women in Africa that the aging world of Europe and Asia actually relies on. We think of ourselves as a bridge. We make conditions and investment conditions in Africa strong, so capital from the North can go where the labor force is dynamic and strong. My wish for Africa is to do well for yourself and do well for the rest of the world. 

Edited by: Chrispin Mwakideu