IMF Urged to Enhance Debt Restructuring Role Amid Growing Challenges

WASHINGTON: Kristalina Georgieva, the International Monetary Fund’s chief, stated on Tuesday that the organization needs to play a more proactive role in global debt restructuring efforts. She emphasized the escalating difficulties encountered by vulnerable low- and middle-income nations.

During a discussion hosted by the Bretton Woods Committee, Georgieva conveyed that several African nations expressed the need for more technical support from the IMF as they manage substantial debt burdens.

She also mentioned that the Global Sovereign Debt Roundtable, comprising both creditor and debtor nations along with the IMF and the World Bank, has endorsed a fresh framework to aid countries in navigating the complexities of restructuring considerable debt obligations.

The roundtable is scheduled to release this framework following a private meeting in Washington, D.C., held during the IMF and World Bank’s spring meetings.

In a joint statement, Georgieva and Hervé Ndoba, who is the chair of the African Caucus as well as the Central African Republic’s minister of finance and budget, highlighted the risk of additional adverse events for Africa, which could potentially undermine the effective policies implemented to curb inflation, stabilize government debt, and reduce external economic imbalances.

“Although Africa’s economic growth demonstrates some strength despite numerous global shocks, the abrupt change in the global forecast has disrupted the growth pace,” the leaders observed, noting a downward adjustment of 0.3 percentage points in Africa’s projected growth for 2025, bringing it to 3.9%.

African leaders and the IMF concurred on the imperative of ensuring economic and financial stability while striving to achieve the continent’s economic advancement objectives.

They advocated for domestic policy changes that bolster fiscal sustainability by enhancing revenue streams and optimizing expenditure efficiency.

“Now more than ever, the Fund is dedicated to partnering with its member nations to help them steer through the intricate global economic landscape,” the joint statement affirmed, pointing out that the addition of a 25th seat on the Executive Board for sub-Saharan Africa has amplified the region’s representation within the fund.

The statement further guaranteed that the IMF will “remain adaptable” in its response to new challenges and will support initiatives like the G20 Common Framework and the Global Sovereign Debt Roundtable.

It commended the IMF’s initiatives to revise its debt sustainability assessment for low-income countries and to re-evaluate the structure and conditionality of lending programs, with the aim of rectifying macroeconomic disparities and fostering economic expansion.

The African Consultative Group is composed of governors representing 12 African countries belonging to the African Caucus and IMF leadership.