Marrakech, Morocco: International Monetary Fund Managing Director Kristalina Georgieva made the following statement at the IMF/WB Annual Meetings in Marrakech, Morocco:
"Today marks an important milestone in our collective efforts to strengthen support for our most vulnerable members. I am delighted to announce that we have successfully met the fundraising targets for the Poverty Reduction and Growth Trust (PRGT)agreed to in July 2021. Reaching these targets is critical to allow the IMF to continue to support low-income countries with zero-interest rate financing to meet their evolving needs.
Low-income countries have been hit hard by multiple global shocks in recent years. Not only are they bearing the brunt of economic scarring from the pandemic, these countries are also grappling with food price shocks, high debt, and the increasing occurrence of climate disasters. Throughout these challenges, the IMF has been a strong partner for low-income countries.
Since the onset of the pandemic, zero-interest lending through the PRGT has increased fivefold – to about US$30 billion – benefiting 56 countries. Currently, 30 countries (almost 45 percent of all PRGT-eligible countries) have an ongoing PRGT-supported program, the largest share since the inception of the PRGT in 2009. Through these programs, the IMF is playing a crucial role in supporting strong policies to drive sustained and inclusive growth, catalyzing financing from partners, and unlocking debt treatment where needed. Looking ahead, demand for PRGT support is projected to reach nearly US$40 billion during 2020-24, about five times the historical average.
The IMF has stepped up its support to low-income countries in several ways. Within weeks of the pandemic, we scaled up our emergency financing at unprecedented speed, providing a 'lifeline' to our most vulnerable members. A year later, the2021 SDR allocationwas an additional 'shot in the arm' that provided liquidity to help low-income countries face the immediate impacts of the pandemic. Today, SDR channeling from stronger members to the PRGT provides a much-needed 'booster' to help low-income countries tackle the economic fallout of multiple shocks and address transformational challenges.
Heading into the Annual Meetings, we had just successfully met our target to raise US$17 billion (SDR 12.6 billion) for PRGT loan resources. And here in Marrakech, I am delighted that we have also met our fundraising goal of US$3 billion (SDR 2.3 billion) for PRGT subsidy resources, which ensures that PRGT financing can continue to be provided at zero-interest rate. I would like to thank the membership for their generosity in helping us achieve this important milestone and for their unwavering commitment to support our most vulnerable members.
What is even more remarkable about today's milestone is that more than 40 contributors have delivered for these urgently needed subsidy resources – one-third of them from emerging market economies, including from here in Africa. Even countries that had previously benefited from IMF support are now stepping up and giving back in a remarkable show of solidarity.
This broad-based show of support is a testament that, even in a more fragmented world, we can still come together to help our most vulnerable members. And it could not be more befitting that this show of solidarity culminates here in Africa, where, for the first time in 50 years, we gather for our Annual Meetings.
Looking ahead, keeping the PRGT adequately resourced will require continued efforts. The strong demand for concessional financing combined with sharply higher interest rates will continue to increase the need for PRGT subsidy resources. The IMF is committed to making sure that the PRGT continues to provide strong support to low-income countries. Having completed this important stage of fundraising, we will now embark on a comprehensive Review of the Fund's Concessional Facilities and Financing (2024/25 PRGT Review) to ensure that the long-term financing capacity of the PRGT is placed on a sustainable footing.
Low-income countries need an adequately resourced IMF to meet their rising needs as they grapple with global shocks and transformational challenges. I am confident the global community will step up yet again with the same commitment and solidarity."
