IMF - Afrikan Heroes

IMF Supports Digital Money for Cheaper Cross-Border Payments and Remittances

April 15, 2021

The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, has called on governments and individuals to adopt digital money for “faster, easier and cheaper” remittance and cross-border payments. Georgieva said this at a virtual workshop on how digital money can facilitate remittances. At the meeting, she spoke extensively on the potential of decentralised money to increase remittance flows to developing countries and “reshape cross-border payments”.

The IMF boss’ call came on the heels of the historic disruption of the traditional payment by digital currencies. The disruption is considered a major threat to traditional payment channels.

Georgieva said the adoption of digital currencies as an option for sending and receiving money is a “revolution” that leaves many countries with little or no choice. “Last October, The Bahamas launched the Sand Dollar, the world’s first central bank digital currency. Many other economies are exploring their pilot programmes. Other forms of digital money, such as privately issued stable coins, are increasingly being used for cross-border payments. We are witnessing a revolution in digital money that could make remittances easier, faster and cheaper,” she said.

According to her, a cheaper remittance transfer would help poor households across the world to cope with the impacts of COVID-19 and the danger “we face from growing divergence across countries”.

Divergences in access to vaccines, in recoveries from the pandemic and access to a digital future, she noted, are key challenges the world must find a smart way to address, stressing that remittances have always played a key role in improving the lives of people in developing economies and supporting economic activity.

“As we look for ways to address the challenges of economic divergences across countries, we need to use every tool we can to support those most affected by the pandemic. And with the risk of a growing digital divide between rich and poor countries, we must also ensure that all countries benefit from the latest innovations in digital money and payments, particularly remittances,” she said.

The IMF chief executive said that “new forms of digital money could provide a parallel boost to the vital lifelines that remittances provide to the poor and to developing economies”.

She said the right frameworks are required for peer-to-peer transfers of central bank digital currencies or privately-issued stable coins, which “could lead to shorter payment chains, faster transactions and more competition among remittance providers”.

She said the biggest beneficiaries would be vulnerable people sending small value remittances: those most at risk from being left behind by the pandemic.

Georgieva added: “With such digital disruption, however, also comes risk. We can address the risks posed by digital money by focusing our efforts on three areas. First, new forms of money must remain trustworthy. They must protect consumers, be safe and anchored in sound legal frameworks, and support financial integrity.

“Second, domestic economic and financial stability must be protected by carefully designed public-private partnerships that underpin the provision of digital money, including fair competition. Third, frameworks should be geared toward ensuring the international monetary system remains stable and efficient.”

She said the world must do everything to build a payment system that works for all countries and avoid a “digital divide”. She suggested that reserve currency configurations and backstops would necessarily evolve smoothly.

The IMF, she noted, would offer itself as a transmission line of best practices, capacity building and policy development as the world transitions into a decentralised money era. “With our mandate to safeguard monetary and financial stability, the IMF has an important role to play in supporting our members to deliver on these priorities, and we are ramping up our capacity. In doing so, we will continue our close collaboration with key stakeholders – including the Financial Stability Board, the Bank for International Settlements, the World Bank and industry players and each must leverage its comparative advantages,” she said.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

IMF Taps Antoinette Sayeh, Former Liberian Finance Minister as Deputy Managing Director

March 2, 2020

The International Monetary Fund (IMF) has taken its promise on gender balancing to task by tapping Dr. Antoinette Sayeh who was the Minister of Finance of Liberia from 2006 to 2008 as the Fund’s Deputy Managing Director. In this role, Ms. Sayeh, who has been a very prominent face at the Brettonwoods institution where she was Head Africa Department of the International Monetary Fund (IMF) for eight years from 2008 to 2016 will in her new role as Deputy Managing Director assist Kristalina Georgieva of Bulgaria who, since last December, has been the Managing Director of the institution.

The appointment which takes effect from March 16 will usher the 62 year old Antoinette Sayeh as member of the highest policy making body on global financial issues which is the IMF Executive Board. She will also join the team of Deputy Managing Directors who support Georgieva in her missions at the head of the IMF. As head of the Africa Department, Sayeh led a “profound transformation of the relationship between the IMF and our African members,” Georgieva said. She was the first woman to head the department.

Sayeh is familiar with the back and forth between Liberian public institutions and multilateral institutions: after starting her career as a civil servant in Liberia’s Ministries of Finance and Planning, she then spent 17 years in various senior positions at the World Bank.

During her tenure, she had to deal with a dysfunctional Bank of Central African States (BEAC), manage the crisis between the IMF and the Economic and Monetary Community of Central Africa (CEMAC), and moved to suspend all IMF assistance to Mozambique, which was revealed to have hidden a billion dollars in debt.

Sayeh was also on the front line in responding to the economic consequences of the Ebola epidemic in 2014 and lead a crusade against energy and agricultural subsidies. The former Liberian Finance Minister was for four years a visiting researcher at the International Development Research Centre in Canada, which is associated with World Bank.

Concerned of the dangers of mass unemployment in Africa, Sayeh is fully aware of the relationship between budgetary policies and efforts to fight poverty through the IMF. Now as close to the IMF summit as an African can be (the institution’s leadership is usually a European), Antoinette Sayeh, who holds a BA in economics and a PhD in international economic relations from the Fletcher School at Tufts University in the USA, follows in the footsteps of Alassane Ouattara, Ivorian President who was the organization’s Deputy Managing Director from 1994 to 1999.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

IMF/WORLD BANK CALLS FOR MORE RESOURCES TO MITIGATE CLIMATE CHANGE

October 24, 2019

THE launch of the International Platform for Sustainable Finance at the ongoing IMF/World Bank annual meetings marks the beginning of serious efforts at cooperation to pull resources together to fight climate change. Few countries have the means to finance environmentally-friendly development from their budget and therefore there is the need to raise money from the market to grow sustainably according to Valdis Dombrovskis, EU’s Vice President for Social Dialogue. Seven countries comprising Argentina, Canada, Chile, China, India, Kenya and Morocco together banded together to launch the platform.

Valdis Dombrovskis, EU’s Vice President for Social Dialogue.

For Kristalina Georgieva, IMF Managing Director, she is happy the IMF was the place chosen to launch the platform highlighting the importance of green finance in the fight against climate change and achieving the SDGs. Recalling her time at the World Bank where she was part of the team that launched the first green bond in 2008, Georgieva says it is important to develop market instruments that can shift resources to sustainable projects.

“The objective of carbon pricing and tax is to capture finance for sustainable development” she says. About $900 billion has been raised according to her but this represents just 2 percent of total credit outstanding while green bond has raised just $86 billion. Raising sustainable finance from the market, in her view, should be guided the principles of transparency, disclosure, impact and cooperation.

China despite being the workshop of the world is committed to green and sustainable development according Yi Gang, Governor of the Peoples’ Bank of China. China financial market has green instruments that is “evolving in line with the need to change lifestyle and ways of production to reduce carbon emission”.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.

Ghanaian Appointed Chairman of IMF/World Bank Board of Governors

October 22, 2019

It was a major breakthrough for Africa over the weekend as Ghana’s Central Bank Governor; Dr. Ernest Addison was appointed Chairman of the Board of Governors of IMF and the World Bank Group. With this appointment, Dr. Addison will chair the Board of Governors of IMF and the World Bank Group for 2020. To this end, he will preside over the 2020 plenary and other committee responsibilities.

Dr. Addison takes over from Aiyaz Sayed-Khaiyum who is the Fijian Attorney-General and the Minister for Economy, Civil Service and Communications. The Board of Governors is the highest decision-making body of the IMF consisting of one governor and one alternate governor for each member country, the governor who is mostly appointed by the member country of the Brettonwoods institution is usually the minister of finance or the head of the central bank.

While the Board of Governors has delegated most of its powers to the IMF’s Executive Board, it retains the right to approve quota increases, special drawing right (SDR) allocations, the admittance of new members, compulsory withdrawal of members, and amendments to the Articles of Agreement and By-Laws.

The Board of Governors also elects or appoints executive directors and is the ultimate arbiter on issues related to the interpretation of the IMF’s Articles of Agreement. Voting by the Board of Governors usually takes place by mail-in ballot.

With this elevation, Dr. Addison will among other things chair other functional Committees of the two institutions. He will chair the Joint Committee on Remuneration of Executive Directors and their Alternates (JCR). His duties also include the appointment of two other Committee members (on the recommendation of the President of the Bank and the Managing Director of the Fund), reviewing briefing papers, and convening meetings of the Committee. And equally chair the Joint Procedures Committee (JPC)/MIGA Procedures Committee.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.

Photo news : Nigeria’s Minister of Finance Zainab Shamsuna Ahmed at the IMF Headquarters

October 19, 2019

Photo News

(1) Director of the African Department at the International Monetary Fund (IjjMF) Abebe Aemro Selassie moderates the Governor Talks with him is
Nigeria’s Minister of Finance Zainab Shamsuna Ahmed at the IMF Headquarters during the ongoing 2019 IMF/World Bank Annual Meetings in Washington D.C. United States.

G_20 governors — The G-20 Group Photo held at the IMF Headquarters during the 2019 IMF/World Bank Annual Meetings, October 17, 2019 in Washington, DC. IMF Photograph/Ryan Rayburn

(2) Finance Ministers and Central Bank Governors of the G-20 Countries after their meeting yesterday during the ongoing International Monetary Fund/World Bank Annual Meetings in Washing D.C.United States.

Director of the African Department Abebe Aemro Selassie moderates the Governor Talks – Nigeria with Nigeria’s Minister of Finance Zainab Shamsuna Ahmed at the IMF Headquarters during the 2019 IMF/World Bank Annual Meetings, October 17, 2019 in Washington, DC. IMF Photograph/Cory Hancock

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.

New IMF Managing Director Calls for Equal Pay for Equal WOrk

October 17, 2019

THE equal work, equal pay movement surely got new converts after Kristalina Georgieva, the IMF’s new Managing Director made bold commitments to enforce pay parity at the IMF. “At the end of this meeting, I will sit down with human resources to discuss and review fairness across board,” she said emphatically.

In a one-on-one conversation on Women, Work and Leadership moderated by Ravi Agrawal, Managing Editor of Foreign Policy at the ongoing annual meetings, Georgieva says everyone benefits from gender equality. Tracing her professional journey, she recounted how she used to work harder than her male colleagues as a professor just to earn equal pay, saying “we cannot afford to be gender blind anymore”.

“I used to be gender blind and believe you are either good at what you do or not,” she added

Beyond the moral argument for equality, the IMF, she says, bring evidence-based approach to the debate and show the economic benefits of gender equality. An IMF study finds that global GDP could be boosted by between 35 and 40 percent if unpaid work is captured in official statistics even as more women entering the labour force will help to attain the SDG’s.

She advocates for legal changes that can enable women achieve their full potential as about 1.7 billion women globally are hindered from fully achieving their potential due to legal constraints such as land ownership. How to achieve this? It will take nothing short of societal transformation to achieve gender parity while not unmindful of the fact that there will be pushbacks from more conservative societies, says Georgieva.

Firm political commitments and messaging from the top, she adds, will help sway public opinion and help more women in such societies get into the labour force.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.

Peak energy consumption key to climate change — IMF Study

AS changes in global climate wreaks havoc from coast to coast, the need to transition from fossil fuel as a source of energy to more sustainable renewable energy is now more urgent. However, this can be quickly achieved if the world invests more in new technologies to achieve energy efficiency, according to an IMF study, whose findings were discussed at the ongoing annual meetings.

Lama Kiyasser — Lama Kiyasseh of the IMF Research Department

The study, which looked at historical data covering 150 years and about 100 countries, shows that economic growth contributes increased consumption of energy as a growing middle class snap up energy-hungry durable products such as cars, fridges and air conditioners. However, the good news is that there is a decoupling of energy consumption growth and income growth at higher income threshold.

“Richer economies consume more energy than poorer ones. But only to a point because as countries get richer they move from biomass to more efficient sources of energy,” says Christian Bogmass of the IMF Research Department and one of the study authors.

The chokepoint of energy consumption, the study finds, is at $12,000 per capita income with an estimated energy peak at $120,000. Although, this means that energy consumption is increasing in emerging market economies such as China and India, it is levelling off in developed countries just as energy efficiency has reduced the energy consumption peak to $55,000 per capita which many rich countries have achieved.

To curb greenhouses gases, the world, according to Lama Kiyasseh, one of the study authors, must reduce its consumption of fossil fuel which could be achieved by an acceleration of the energy transition from fossil fuel to low carbon energy sources or a peak and decline in global energy consumption.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.

Congo Republic’s Debt Is 114% of Its GDP But IMF Has Just Approved A Major Bailout

July 13, 2019

Currently, Congo Republic’s debt stands at 114% of its GDP but the International Monetary Fund is helping to cut it down. Alone, about 1.6 trillion CFA francs ($2.7 billion) is owed to China according to a February 2018 report by the French Embassy in Congo, which cited the Finance Ministry.

Private creditors like Glencore and Trafigura are owed 1.2 trillion CFA francs, it said. Chinese entities account for about 34 percent of Congo’s external debt. But all that is about to change with this IMF intervention.

Here Is The Deal

The bailout did not just happen. Congo Republic had been mounting intense pressure on the IMF for a bailout.
But IMF had insisted that China would agree to restructure debt owed by the Republic of Congo before it grants the debt-laden central African nation a bailout.
Congo’s negotiations for a bailout has been on for two years before this.
In April 2019, Congo reached an agreement with China to restructure a portion of its Chinese debt
Under the terms of this restructuring deal, repayment of 944 billion CFA francs will be extended to an additional 15 years.
Congo, however, must pay off a third of that amount by the end of 2021 and China will not reduce the amount of principal owed, a process known as taking a haircut.
According to the IMF, this is a substantial reduction in the amount of debt service that would have been required during the program period.
What is hoped to achieve here is that the extension of the debt’s maturity will ease Congo’s debt service burden in following years?
The International Monetary Fund’s (IMF) executive board, in exchange, has now approved a bailout worth nearly $449 million for the Congo Republic.
But all that would not happen just like that. For Congo to continue to benefit from the bailout, IMF has demanded that Congo put in place processes to ensure the long-term sustainability of its debt as a precondition before going for a three-year extended credit facility programs, going forward.

Congo’s economy suffered from a sharp drop in crude prices in 2014, and debt levels had ballooned to 118% of GDP by 2017.

Now, This Move Is So Significant For Other African Countries Under Heavy Debt Burdens With China And Here Is Why

Government debt as a percent of GDP for African countries, 2017. *Source: IMF, 2018. Regional Economic Outlook*

This bailout potentially set a precedent for other nations struggling under the weight of large debts to China.

It appears that what IMF has succeeded in doing is to alert other countries borrowing from China that China would never cut off any percent from any borrowed sum, but may instead, prolong the period of repayment.

Many observers see Congo as a test case for the IMF.
A number of African countries facing unsustainable debt resulting from commercial borrowing, a boom in Eurobond issues and years of Chinese lending on the continent are expected to turn to the IMF for help in the coming years.

In 2017, public debt as a percent of GDP in sub-Saharan Africa was 45.9 percent relative to the 117 percent external debt-to-GNI ratio of 1995.

This is even bound to grow more because sovereign debt financing is inevitable given that African countries budgetary resources are insufficient to finance their vast development agenda.

“The IMF is tacitly accepting that China will not take a haircut on debts to African governments,” said one banker, who has followed the negotiations.

The IMF is also advising Congo’s government to restructure high-interest debt it contracted with oil traders including Glencore (GLEN.L) and Trafigura despite a previous pledge to the Fund that it would not engage in oil-backed borrowing.

“I think they’ve learned their lesson as to the costs of these kinds of practices,” Alex Segura, IMF mission chief for Congo, told Reuters.

IMF Is Also Pitching Its Stakes And Leaving African Countries At Their Own Mercy

Description of events leading to the present debt situation

All that bailout would not just happen without a reciprocal deal. For instance, the IMF said in November that Congo’s government must take a series of steps before the lender agrees to a bailout, including reforms to improve governance and transparency, adjustments to the state budget. It’s also requested “explicit financing assurances,” including debt relief, from creditors before it considers a bailout.

With all these, African countries with heavy debt burdens may all be sitting on a time bomb.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Afrikan Heroes

Tag: IMF

IMF Supports Digital Money for Cheaper Cross-Border Payments and Remittances

Kelechi Deca

IMF Taps Antoinette Sayeh, Former Liberian Finance Minister as Deputy Managing Director

IMF/WORLD BANK CALLS FOR MORE RESOURCES TO MITIGATE CLIMATE CHANGE

Ghanaian Appointed Chairman of IMF/World Bank Board of Governors

Photo news : Nigeria’s Minister of Finance Zainab Shamsuna Ahmed at the IMF Headquarters

New IMF Managing Director Calls for Equal Pay for Equal WOrk

Peak energy consumption key to climate change — IMF Study

Congo Republic’s Debt Is 114% of Its GDP But IMF Has Just Approved A Major Bailout

Here Is The Deal

Now, This Move Is So Significant For Other African Countries Under Heavy Debt Burdens With China And Here Is Why

IMF Is Also Pitching Its Stakes And Leaving African Countries At Their Own Mercy

Charles Rapulu Udoh

Facebook: https://web.facebook.com/Afrikanheroes/