Gathered as part of the IMF’s Spring Meetings, the G24, the intergovernmental group consisting of 24 countries from Sub-Saharan Africa but also from the Caribbean, Latin America and Asia, have highlighted the growing fragilities of emerging economies, particularly those in Sub-Saharan Africa.
The group deplores an accumulation of shocks that threatens to erase the economic progress achieved in recent years. The rise in energy prices hits oil-importing countries hard, worsening external imbalances and increasing pressures on public finances.
Increased Fragilities and Financing Retreat
The G24 notes an increase in debt-related vulnerabilities in emerging and developing markets. At the same time, private capital flows to these economies are contracting, limiting their ability to finance growth and cope with external shocks.
In this context, the IMF’s role as a financial safety net is deemed “crucial” to support the most exposed countries. The group also stresses the need for the institution to remain focused on its fundamental macroeconomic missions.
Strengthening Crisis Response
Facing these challenges, the G24 calls for strengthening prevention and crisis management mechanisms. Access to adequate financing is considered vital, particularly for the most debt-vulnerable countries.
The group also calls for better collaboration among international financial institutions, banks and national non-bank actors, in order to broaden sources of financing. Particular attention is given to improving access to credit for micro, small and medium enterprises (MSMEs), regarded as an essential engine of growth.
The G24, through the voice of its president, the Nigerian Olawale Edun, Minister of Finance in charge of Nigeria’s economic coordination, also insists on the urgency of accelerating the development of financial infrastructure in emerging countries, an indispensable condition for strengthening economic resilience.
It also calls for reforms enabling broader and fairer participation of rating agencies in risk assessment.
Reforming a system deemed insufficient
Underlying this, a central question remains: does the global financial system really work for African economies?
For the G24, despite the efforts undertaken by the IMF and the World Bank to adapt their programmes, a significant gap persists. More action is needed, notably in debt restructuring, to better protect vulnerable countries in times of crisis.
Finally, the group warns against the risk of relegating the financing of climate transition to secondary priority in a context of economic tensions. It calls for accelerating global climate action, notably through financial innovations able to mobilize more resources.
For African economies, particularly exposed to the effects of climate change, it is essential that these investments are not sacrificed. The challenge now is to reconcile short-term crisis management with long-term financing of sustainable development.
