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IMF suspends interests on outstanding loans to developing countries


The International Monetary Fund (IMF), says it has suspended interest rates and payments on all its outstanding fund loans to Sub-Saharan African countries till 2011 to enable such countries deal with the global financial crisis.

The fund has also revised its interest rates structure on its fund lending to be more concessional to Sub-Saharan economies.

The IMF Director for Africa, Ms Antoinette Sayeh, annonced  this at a press conference in Istanbul, Turkey at the on-going Springs Meeting of the IMF and the Word Bank.

Ms Sayeh stated that African economies were expected to see substantial financial support for their economies in the coming months as a result of “this flexibility in our tool kit”.

Ms Sayeh noted that 2009 had been a particularly difficult year for Africa as it was hit by two quick succession of severe crisis, that is, the food fuel crisis of 2008 and the global financial crises.

She said the fund had listened to feedback from its member countries over the years in terms of the need to reform conditionalities.
“We have taken very seriously these concerns and have worked hard in the course of the years to address”.

Ms Sayeh stated that the board had approved significant reforms to the fund’s conditionality adding, “ the fund is very much a partner among many partners that support African government’s”.

“Our mandate is on macro-economic policies, so our programmes are very much focused on what reform actions are necessary to restore macro-economic stability”, she added.

The IMF African Director again stated that the fund’s programme were currently moving away from trying to address all structural issues in the economy at once through and focusing on the things that really matter.

“We are really making progress on putting in place those measures that will help us achieve particular macro-economic objectives”, she stated, adding that “conditionality is not all bad and of course also protects resources for other countries that the fund lends”.

The African Director indicated that contrary to reports that countries in the sub-region complained of perceived harsh conditionality, “ ‘the demand for Fund advice and support has increased significantly and I think that reflects that we are a valued partner in Sub-Saharan Africa”.

On the Nigerian Banking reforms, she said the fund would assist and was already providing technical support to the Nigerian Central Bank.

On the effects of external shocks on African economies, Ms Sayeh stated that African government’s needed to work harder to diversify their economies to mitigate against some of the impact of particularly commodity prices.

Source: Daily Graphic

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