Africa needs carefully calibrated domestic policies and stronger support from the international community. That is to recover from the pandemic and return to its path of stronger growth. This was according to the head of the IMF and the African Caucus during a Thursday meeting.
International Monetary Fund Managing Director Kristalina Georgieva and Domitien Ndihokubwayo, Chairman of the African Caucus, issued a joint statement. This was after a meeting of the African Consultative Group, which included senior representatives from 12 African countries.
They said the main priority was to scale up COVID-19 vaccine production capacity and speed up vaccine roll-out. However, it was also important to prioritize policies as these could help protect livelihoods and vulnerable groups.
Africa remains beset with the COVID-19 health crisis, which damaged its economy the worst in decades. Millions of people have fallen further into poverty.
According to the IMF and African Caucus leaders, oil-rich North Africa was likely to recover faster than Sub-Saharan Africa. Per capita incomes in many countries should not return to pre-crisis levels before 2025, they noted.
They called for transformative policies, increased investment in digital technologies, and climate-resilient infrastructure.
They said, strengthening the business climate would spur productivity and attract private investment. Advancing trade and integration through implementing the African Continental Free Trade Agreement would also do the same.
Ndihokubwayo told Georgieva that substantial additional financing would be required for Africa to meet its key development objectives. However, no details were provided.
IMF Calls for Tax Hikes on The Wealthy
The income gap between the richest and poorest has worsened during the coronavirus pandemic. That said, the International Monetary Fund has called on governments to close this gap by spending more and taxing wealthy households.
Surveys showed that governments would have the support of the public. The Washington-based organization said that if they shifted the burden of taxation away from low and middle earners to better-off members of society.
This was in a warning that the economic shock caused by the pandemic could weaken public attitudes. That’s towards the fairness of taxation and welfare systems, and this could lead to social unrest.
The IMF acts as a global lender of last resort. Over the last year, the organization issued tens of billions of dollars worth of loans to developing world countries.
During the pandemic, trends have accelerated a move to digital services. The IMF said this would damage unskilled workers’ job prospects and lead to higher rates of long-term unemployment.