CAIRO – 19 April 2020: Egypt's Minister of International Cooperation and Egypt's Governor at the World Bank Group (WBG) Rania Al Mashat participated Friday in a meeting titled "Mobilization for Africa" within World Bank/IMF Spring Meetings 2020.
The group's vision reflects Egypt's strategy on international partnerships amid COVID-19 crisis presented by Minister Mashat earlier in April in a meeting with development partners.
Regarding the macroeconomic implications, the minister focused in that meeting on the potential balance of payments and fiscal pressures that could arise given the global consequences of COVID on supply chains, demand, tourism, and trade. This was followed by a detailed discussion about Egypts macroeconomic policy responses both fiscal and monetary as well as structural reforms that are collectively aimed at flattening the recession curve as mentioned by the World Bank most recently.
Al Mashat underscored the various fiscal and monetary policies undertaken to date to help reduce the financial impact on households and the private sector to mitigate the possible slowdown in economic activities. The Minister also pointed to the possible impact of the virus on the SDGs.
The minister mentioned that efforts to contain the corona virus crisis have expedited structural reforms related to social protection & social safety nets as well as addressing informality. This has been facilitated also by pushing ahead the financial inclusion & digital reform agenda as demonstrated by the recent directives issued by the Central Bank of Egypt.
Here is the World Bank and IMF's communiqué on the "Mobilization for Africa" meeting:
Together, official creditors have mobilized up to $57 billion for Africa in 2020 alone—including upwards of $18 billion from the IMF and the World Bank each—to provide front-line health services, support the poor and vulnerable, and keep economies afloat in the face of the worst global economic downturn since the 1930s. Private creditor support this year could amount to an estimated $13 billion. This is an important start, but the continent needs an estimated $114 billion in 2020 in its fight against COVID-19, leaving a financing gap of around $44 billion.
The World Bank Group and the IMF suggested a range of financing options and policy tools as part of the pandemic response, many of which African countries are looking to implement as they plan for the medium and long-term impacts of the crisis. These include further financing from official and private sector creditors.
“The World Bank Group is putting its full capacity to work for people across Africa as they fight this pandemic,” said World Bank Group President David Malpass. "The world has rarely seen a crisis of this magnitude, and no one can stand on the sidelines; we cannot leave any country behind in our response. We have provided emergency support to 30 countries across Africa so far, with more to come, and will continue to advocate for debt relief and increased resources, especially for those countries hardest hit by COVID-19.”
“Our message is clear: We stand with Africa: Through our commitments today we are ‘Mobilizing with Africa’ to help soften the blow of COVID-19 on the continent,” IMF Managing Director Kristalina Georgieva said. "The pandemic is having a monumental impact across Africa and the IMF is leaning forward with many other partners to leverage our resources and to help save lives and livelihoods.” She added that “The IMF will provide more concessional financing and we count on others to step up and do their part, to shield the economy and the people, and provide the foundations for a strong and sustainable recovery”.
It will also be critical for African countries to work together especially on the health response and on limiting trade disruptions to ensure freer movement of medical and food supplies. With so many people working in informal jobs – 89 percent of workers in Sub-Saharan Africa alone – countries need to take immediate steps to expand social safety net programs and support workers and small enterprises. Government services will equally need attention to keep running effectively for the duration of this crisis.
World Bank Group and IMF leaders applauded the groundbreaking accord among G20 countries to temporarily suspend debt payments to IDA and least developed countries beginning May 1, 2020.
The World Bank Group is taking broad, fast action to help developing countries strengthen their pandemic response, increase disease surveillance, improve public health interventions, and help the private sector continue to operate and sustain jobs. It is deploying up to $160 billion in financial support, $55 billion of which will be for Africa, over the next 15 months to help countries protect the poor and vulnerable, support businesses, and bolster economic recovery.
The IMF has been moving rapidly to provide comprehensive support its member countries, by leveraging our $1 trillion lending capacity; doubling annual access limits for our rapid disbursing vehicles to about $100 billion to respond to unprecedented calls for emergency financing from more than 100 countries; approving a short-term liquidity line for countries with very strong economic fundamentals and exploring additional tools to help meet countries’ financing needs; and, revamping our Catastrophe Containment and Relief Trust to help 29 of our poorest and most vulnerable members through rapid debt service relief, 23 of which are in Africa.