By Africa Links 24
Published on 2024-03-05 10:17:20
This article discusses the challenges African countries face in balancing spending and revenue mobilisation efforts, as highlighted by ECA Executive Secretary Claver Gatete. He emphasized the need to explore all options quickly due to the changing nature of debt sources. Hanan Morsy, Deputy Executive Secretary of the ECA, pointed out the significant financing needs for emerging markets and developing countries to address climate change according to a report by the Independent High-Level Expert Group on Climate Finance.
She noted that the IMF has responded to this need with the establishment of the Resilience and Sustainability Trust (RST) to assist low-income and vulnerable middle-income countries in building resilience to external shocks and ensuring sustainable growth. However, Morsy acknowledged the challenges the IMF faces in meeting the demands of the increasing number of countries seeking RST programs, particularly in addressing climate and energy issues.
To maximize the effectiveness of the RST, Morsy suggested measures such as scaling up green debt swaps, providing credit enhancements, and using the Resilience and Sustainability Fund (RSF) as a policy instrument to boost accountability and transparency for private financing.
Various key measures that could enhance this approach include establishing a national reporting system highlighting climate performance indicators, implementing a transparent audit process for ESG financing instruments, publishing eligible projects, and developing a green financing framework aligned with the ICMA framework.
In conclusion, the challenges faced by African countries in financing sustainable development and addressing climate change are significant. The IMF’s efforts through the RST and other initiatives are crucial in supporting countries in building resilience and ensuring sustainable growth. However, there is a need for innovative approaches and enhanced transparency to maximize the impact of these efforts and attract private financing towards sustainable development goals.
