While the former World Bank Chief Executive-Georgieva, assumes the office Managing Director of the International Monetary Fund (IMF) for a five -year term, the African leaders are hopeful of a more sympathetic approach, since she isthe first person from an emerging economy to lead the body as well as an old African hand.
Kristalina Georgieva brings professional and personal experience, having worked in Africa and with African countries and African leaders. She has first -hand knowledge about its challenges including impact of climate challenge, need for boosting agriculture and employment generation programs, etc. After her seven- year assignment with World Bank (1993-2010), Georgieva was appointed as European Commissioner for Humanitarian Aid and Crisis Management. During her four -year association with that body, she managed successfully drought and famine relief in the Horn of Africa in 2011, and later providing US$142million to refugee camps in Sudan and South Sudan.
Before assuming the office of all powerful Bretton Woods institution, Georgieva said her immediate priority was to help countries minimise the risk of financial shocks and to help them cope with downturns. Her priorities are seemingly in traction with the decelerating global growth, trade disputes and mounting debts of developing and least developed world, particularly countries in Africa.
Foremost challenge of Africa, rather immediate one, is slowing of investments from China the biggest investor in the continent. Given the vacillating nature of the US approach of “switch on and switch off “Africa policy, the clamour for impeachment of President Donald Trump, and its other political and economic compulsions, US is most unlikely to step in to bridge the investment gap.
Does it mean Africa as a continent will have to be more dependent on multilateral organizations to realize its growth estimate of 3.5% in 2019, up from 3% in 2018. This is the estimate of IMF’s own. To realize that, IMF along with World Bank will have to pump resources to protect the economies in the region from the tailwinds of a tough global economic climate. Almost all countries in Africa ranging from mighty Nigeria and South Africa to poorer Zambia and Sudan are now queuing up to get concessional loans from the IMF. On the top of it, there are rising concerns among the countries in the region against accepting the “tied loans” given by China, the US or even Russia.
As tempo of development stands now, over the next 15 years or so, Africa is going to be a major stakeholder for the IMF. With 40% of countries in sub-Saharan Africa and lesser number in other part of the region now either in debt distress or deemed high risk due to funds borrowed over the last nine years, a major challenge for the IMF chief over the next five years will be to structure lending on sustainable repayment terms as also to ensure funds are spent on projects that translate into growth and export revenues. With her sound understanding of the challenges faced by Africa, let us hope that she will be able to navigate the continent out of its crisis.
