Sub-Saharan Africa Facing Funding Squeeze Amid Aid Cuts And Tight Financing Conditions, Says IMF’s Abebe Selassie
Director of the African Department at the International Monetary Fund (IMF), Abebe Aemro Selassie, has described the current economic landscape facing Sub-Saharan African countries as one marked by a “brutal funding squeeze,” citing a combination of aid reductions and tightening financing conditions.
Speaking at a press conference on the sidelines of the ongoing IMF-World Bank Spring Meetings in Washington, Mr Selassie noted that the twin shocks are placing immense strain on African governments and worsening fiscal imbalances across the region.
“The combination of cuts in aid and tighter financing conditions in African countries are causing dislocation and particular difficulties for governments,” he stated.
According to him, while external market conditions have at times offered brief windows for borrowing, these have proven inconsistent, leaving many countries shut out from capital markets during critical periods.
“There’ve been periods where markets have opened and some of our market-access countries have been able to borrow,” he noted. “And then other periods where they’ve been closed – and we’re going through one right now.”
Mr Selassie stressed that alongside the fall in concessional funding, domestic financing conditions have also tightened, limiting fiscal space and forcing difficult policy trade-offs.
In light of the constrained external environment, the IMF official urged governments in the region to take a “measured” approach in addressing their development needs, focusing instead on enhancing domestic revenue mobilisation and prudent expenditure management.
“When conditions are particularly difficult, as they are now, countries need to rely more on domestic revenue mobilisation and expenditure prioritisation,” he said.
While acknowledging the scale of the challenges, he emphasised the importance of recalibrating medium-term strategies to lay the foundation for inclusive and sustained economic growth.
The US dollar is weak due to the tariffs imposed by Trump and global geopolitical tensions. There’s less transaction with the dollar. let’s see how long the dollar can be weak. BoG should tell us exactly what they’re doing ? So he can’t see all other currencies rising against the dollar even the Russian Rubble. Are they also doing the same magic?
Over the years that the western world was pampering Africa what did we do with the multiple financial assistance.
Its a know fact that African politicians have just mismanaged misapplied and misappropriated all these monies.
African politicians should bow down their heads in shame and accept blame for the crisis sub saharanpur africa is facing today.