The International Monetary Fund (IMF) and the World Bank will hold their meeting on the African continent for the first time in 50 years on Monday.
The IMF and the World Bank traditionally hold a meeting of finance ministers and central bank governors outside their headquarters in Washington DC in the USA every three years.
This year, this meeting will be held in Marrakesh in Morocco. This country was supposed to host the meeting in 2021, but the meeting was postponed twice due to the Covid-19 pandemic.
An earthquake that killed 3,000 people in southern Morocco last month threatened to derail the meeting again, but the government decided to go ahead with it.
The IMF and the World Bank last held a meeting in Africa in 1973, when Kenya hosted the event and some countries were still under colonial rule.
Half a century later, the continent faces a variety of challenges. These range from wars and various military coups to unrelenting poverty and natural disasters.
“A prosperous world economy in the 21st century requires a prosperous Africa,” said Kristalina Georgieva, managing director of the IMF.
The IMF’s role is to ensure sustainable growth and prosperity for all 190 of its member countries. This is done by supporting economic policies that promote financial stability and monetary cooperation, which are essential to improving job creation and economic well-being.
The World Bank again seeks to reduce poverty by lending money to the governments of its poorer member countries to boost their economies so that the living standards of their people can improve.
Lending boost expected
The IMF and World Bank plan to give Africa a third seat on their executive boards. According to Georgieva, this will give the continent a “stronger voice”.
But the biggest issue is about money.
The member states responsible for the largest contributions are not in favor of a capital increase, as it would force them to invest more money and give greater influence to emerging powers such as China and India.
However, the World Bank is expected to confirm its plans to increase lending by $50 billion over the next decade through balance sheet changes.
Ajay Banga, president of the World Bank, wants to go even further and increase capacity by $100 billion or as much as $125 billion through the contributions of economies of developed countries.
However, this tamale will probably not be cleared up in Marrakesh.
The global lenders could use the meetings to reform their quota systems.
The quotas, which are based on a country’s economic performance, determine how much financing they must provide to the IMF, their voting power and the maximum amount of loans they can get.
‘Same old failed message’
Activists plan to hold a march in Marrakesh to urge the Washington-based institutions to take action against climate change and debt.
Non-governmental organizations say the solutions offered by the IMF and the World Bank only widen the gap between the rich and the poor in the developing world.
Campaigners say global lenders should instead focus on writing off the debt of the poorest nations and taxing the rich more.
Oxfam International said 57% of the world’s poorest countries must cut public spending by a total of $229 billion over the next five years. Oxfam is a global movement that seeks to end the injustice of poverty.
“The World Bank and IMF are returning to Africa for the first time in decades with the same old failed message,” said Amitabh Behar, executive director of Oxfam International.
“The IMF forces poorer countries into starvation through spending cuts, exacerbating inequality and suffering.”