IMF Calls for Active Debt Restructuring Support
By Andrea Shalal
WASHINGTON (Reuters) – The International Monetary Fund (IMF) must become more engaged in debt restructuring processes, according to managing director Kristalina Georgieva. She emphasized the increasing challenges faced by low- and middle-income countries.
During an event hosted by the Bretton Woods Committee, Georgieva mentioned that African nations and others expressed their desire for the IMF to provide enhanced technical assistance for managing high debt levels.
The Global Sovereign Debt Roundtable, which comprises creditor countries, borrowing nations, the IMF, and the World Bank, has approved a new playbook to aid countries in navigating the complex debt restructuring process. This document will be released following a closed-door meeting in Washington on Wednesday during the spring meetings of the IMF and the World Bank.
In a joint statement, Georgieva and Hervé Ndoba, chair of the African Caucus and the finance minister of the Central African Republic, highlighted the risks facing Africa, which could threaten the progress made in reducing inflation, stabilizing public debt, and decreasing external imbalances.
The statement noted that despite some resilience in African growth amidst various shocks, the global outlook’s abrupt change has disrupted this growth momentum. Consequently, projected growth for Africa has been revised down by 0.3 percentage points to 3.9% for 2025.
African leaders and the IMF acknowledged the necessity of ensuring macroeconomic and financial stability and aligning with the continent’s economic development goals. They emphasized that domestic reforms should enhance fiscal sustainability by increasing revenue and optimizing spending efficiency.
The joint statement reiterated the Fund’s commitment to assist member countries in navigating the complex global economic landscape, highlighting the addition of a 25th chair on the Executive Board for sub-Saharan Africa to amplify the region’s voice.
The IMF pledged to remain adaptable in response to emerging challenges and to support initiatives like the G20 Common Framework and the Global Sovereign Debt Roundtable. Furthermore, it welcomed efforts to review the debt sustainability framework for low-income countries and to refine lending program designs and conditions to address macroeconomic imbalances and foster growth.
The African Consultative Group includes governors from 12 African nations within the African Caucus and IMF management.
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