EU mobilises €25 million through the IMF to strengthen economic governance in Sub-Saharan Africa

Today, the EU signed the release of €25 million in support of enhancing the financial management capacity of partner countries in Africa. The funds will be channelled through the International Monetary Fund (IMF).

The IMF’s five African Regional Technical Assistance Centres and its Africa Training Institute provide economic governance capacity development to 46 partner countries in Sub-Saharan Africa. Modalities include technical assistance, training, peer-to-peer learning, diagnostic assessments and support in areas such as public financial management, revenue administration, monetary policy analysis, and economic statistics, in addition to addressing transformational issues such as climate change, digitalisation, and gender equality.

The announcement was made in the margins of the High-Level Dialogue on Development between the EU and the IMF, which took place in Brussels.

Commissioner for International Partnerships Jutta Urpilainen said: “At a time of multiple crises and global challenges, the EU and IMF want to work in closer synergy to back partner countries in building resilience against global shocks. These €25 million will support African partners’ capacity development and help strengthen their institutional setup, which also contributes towards the objectives of the EU’s Global Gateway investment strategy.

IMF Managing Director Kristalina Georgieva added: “I would like to thank the European Union for the generous support, which comes at a critical time for sub-Saharan Africa. The region is confronted with a financing squeeze that compounds shocks and elevates economic imbalances. The European Union’s support will allow us to meet the technical assistance and training needs of economic institutions from all 46 sub-Saharan African countries. As policymakers face a complex economic environment, they need more than ever timely technical assistance and training to address ongoing, emerging, and long-term challenges and pursue inclusive and sustainable economic development. The IMF through its regional capacity development centers supports governments in areas such as public financial management, revenue administration, financial regulation and supervision, monetary policy frameworks, and economic statistics.”

Background

The EU and the IMF share a long-standing partnership in working with partner countries and on global policy issues, including macroeconomic stability, fiscal policy and debt.  The EU is one of IMF’s main partners in capacity development with €328,40 million contribution between 2009 and today.

So far, 30 partner countries, including 12 in Africa, have benefited from the capacity development to help leverage public investment more effectively to meet their climate objectives.

The EU is also contributing to the IMF’s facilities providing debt relief through a €183 million contribution to the Catastrophe Containment and Relief Trust in 2021, which helped low-income countries with debt servicing payments. In addition, the EU added €100 million to the Poverty Reduction and Growth Trust in 2022 through grants. This helps in making loans to PRGT-eligible African, Caribbean and Pacific countries (ACP) facing balance of payments difficulties interest free.