Seth Onyango, bird story agency
Africa is securing a third seat on the International Monetary Fund (IMF) executive board, giving new impetus to a growing push to recalibrate the dynamics of global financial governance.
The World Bank will also add a third board spot for African states, following years of advocacy for increased representation of the continent.
Ahead of the IMF's annual meeting, this year being held in Marrakech, the IMF's Kristalina Georgieva stressed that granting Africa a third seat at the table was part of a move to 'expand the voice' of emerging markets.
"The Fund, with its near-universal membership, plays a vital role in bringing countries together. This means also expanding the voice of emerging and developing countries. I am looking forward to our members agreeing to a third African Chair at our Executive Board," she said.
Tellingly, the ongoing annual meeting of the IMF and World Bank in Morocco is only the second such meeting to be held in Africa. The previous one was in Kenya, 50 years ago.
Nonetheless, the decision to grant African states the additional slots will be critical in shaping global economic dialogues and policies.
The anticipated changes at the Bretton Wood institution come just months after Kenyan President William Ruto in June took a swipe at the global lending landscape, labelling it “unfair".
"It’s punitive, it doesn’t give everybody a fair chance,” he said.
In a conversation with AFP during a Parisian summit aimed at reshaping the international financial structure to further assist developing countries in their fight against poverty and climate challenges, Ruto expressed his concerns.
He highlighted the disparity where developing nations face interest rates up to eight times higher than their wealthier counterparts, attributed to their "risky" status.
Yet, Ruto emphasised Kenya's stance against dependency.
“Some individuals prefer an imbalanced system, desiring us to perpetually be in a position of seeking assistance,” he remarked.
He conveyed his frustration with narratives that depict Africans solely as “climate change casualties” incessantly “seeking aid” and “voicing grievances”.
“Our aim isn’t to merely seek support. We aspire to be an active part of the solution,” voiced Ruto, as the summit neared its conclusion.
Historically, critics have voiced that the Bretton Woods institutions, which include the IMF and the World Bank, have been dominated by a few wealthy countries, thereby sidelining the interests and challenges of the developing world, especially those in Africa.
Since their inception in the mid-1940s, the IMF and the World Bank have operated with a voting power structure significantly skewed in favour of affluent nations like the United States and those in the European Union.
Developing and under-represented nations have long argued that this system perpetuates policies and financial assistance terms that may not adequately address or consider their unique socio-economic contexts
Africa's additional representation, therefore, could potentially influence more favourable loan terms for the continent’s states.
By having a more potent voice in policy formulation, African representatives will be able to advocate for loan terms and financial assistance packages that are more congruent with the distinct needs and capacities of their economies, proponents of the wider representation point out.
Further, the development could be a stepping stone for ushering in a wave of reforms within the global financial architecture.
Equipped with amplified influence, African nations, either in isolation or as a bloc, are looking to steer dialogues towards reforms that ensure a more just and egalitarian global financial order.
Meanwhile, the World Bank is gearing up to leverage its balance sheet, eyeing a sizable expansion of its lending capacity to Africa over the next fiscal decade.
World Bank President Ajay Banga is pitching a more aggressive capital strategy, targeting a surge in the bank's liquidity position to the tune of $100 billion to $125 billion, anchored by equity injections and capital inflows from G7 and other advanced economies.
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