Economic Policies in Africa amidst the Big Funding Squeeze

Marking 10 years of the Africa Training Institute?

Located in Ebene, Mauritius, the Africa Training Institute (ATI) started operations on June 17, 2013, with the objective of training 200 government officials per year across eight courses to build the skills needed to formulate and implement sound macroeconomic policies.

Ten years on, ATI has more than delivered on its initial aspirations and objectives, delivering 230 courses to more than 7,000 government officials. In the last fiscal year 2023 alone, ATI welcomed around 1,100 officials to 41 courses and hosted 11 webinars, 6 outreach events, and 3 peer-to-peer events.

ATI’s course curriculum has significantly expanded to cover climate change, gender equality, digitalization of financial systems and government services, and governance in line with evolving priorities of the IMF and ATI’s membership. ?

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Gearing up for the next five years?

ATI marked its 10th anniversary on January 23-24, 2024 with a two-day hybrid conference held in Ebène, Mauritius. The objective of the conference was to highlight key achievements and lessons from its first decade of operations and engage policymakers in sub-Saharan Africa (SSA) on the challenges facing the region and what this means for ATI’s capacity development (CD) during the next five years (Phase III of its operations, 2024-2029).

Interest in the conference was not dampened by the inclement weather and uncertainty caused by an approaching storm — in-person participation exceeded 100 delegates each day, including about fifty senior government officials from some of the 45 ATI member countries, scholars, representatives of development partners, and senior IMF staff.

IMF’s Managing Director Kristalina Georgieva and First Deputy Managing Director Gita Gopinath delivered virtual remarks.

Remarks by Managing Director Kristalina Georgieva at the 10th Anniversary Conference of the IMF's Africa Training Institute

The conference was officially opened by Renganaden Padayachy, Minister of Finance, Economic Planning and Development of the Republic of Mauritius.?

The conference also featured presentations and panel discussions on the broad theme of "Economic Policies and Capacity Development in the Time of the Big Funding Squeeze", namely:?

• Old and new economic policy challenges in SSA?
• Priorities and challenges for CD in the region?
• How to adapt to the big funding squeeze??
• What has been the impact of ATI in the last decade and what should its priorities be in the next five years???
• How is the IMF supporting its members’ efforts to address macroeconomic issues arising from climate change and build resilience??
• What are the opportunities, risks, and data challenges surrounding of financial technology in Africa???

Building Macroeconomic Capacity in Africa?

Multiple shocks have led to a significant financing squeeze, elevated inflation and debt to be tackled alongside large development needs and macro-critical challenges such as climate change.?

In a video message, IMF Managing Director Kristalina Georgieva highlighted the contribution of ATI and other regional capacity development centers of the IMF in building macroeconomic and financial stability in SSA. Through demand-driven training and technical assistance, including in favor of fragile and conflict-affected states (FCS), these centers support economic institutions in adapting to existing and new economic challenges.?

ATI, specifically, has played a critical and unique role in providing high-quality training for a decade to improve economic policymaking in areas such as macro-economic frameworks and forecasting, fiscal and debt sustainability, financial sector stability and development, and economic statistics.???

Several speakers commended ATI for the diversification of its course program to include emerging policy issues relating to digitalization, gender inequality, and climate change. ??

Over and above the knowledge acquired by training participants, emphasis was also placed on the benefits of peer-to-peer learning and networks established between officials. Being on the ground has also enabled ATI to build long-term partnerships with member countries and regional organizations across SSA.?

The contributions of the host country, Mauritius, and that of development partners and member countries were acknowledged by all speakers.

IMF First Deputy Managing Director Gita Gopinath underscored the importance and urgency of securing financing for ATI’s next phase, starting in May 2024, to meet the high demand for ATI’s work.?

Highlights from panel discussions?

The expected persistence of the funding squeeze was the key highlight of the panel on economic policy challenges in SSA. Overseas Development Assistance (ODA) was not expected to revert to the levels of the last decades, with remittances insufficient to offset the shortfall. The panel opined that, in addition to attracting climate finance and FDI, domestic revenue mobilization had to be prioritized to restore fiscal sustainability for inclusive, long-term growth.?

Responsive fiscal frameworks and effectively designed public-private partnerships were deemed crucial in the context of declining concessional financing for SSA countries. Given the vulnerability of SSA to climate change impacts, the provision of guarantees to lower insurance cost on climate and SDG-related investments was essential, as were other efforts to attract climate finance.

The ability of ATI and other RCDCs to provide customized and timely responses to emerging and topical issues given their proximity and familiarity with member countries and the regional context was recognized as extremely valuable.

To build on ATI’s achievements over the first decade, it was recommended that the Institute maintain the provision of demand-driven, tailored content and continue to deepen focus on climate, digitalization, resource mobilization and peer-to-peer events.

Efforts on gender and language diversity, focus on FCS, and synergies with technical assistance provided by CD Departments and AFRITACs would have to be sustained.

High inflation, food security and financial instability were identified as adverse macroeconomic effects of climate change. Panelists underscored how recovery from natural disasters reduced countries’ capacity for adaptation. The allocation of responsibilities among stakeholders, lack of good quality, high-frequency climate data and risk assessment gaps were the main challenges.

An effective climate change mitigation and adaptation response would entail the integration of climate aspects in policymaking, project design, increased and consistent access to climate finance, involvement of the private sector and multilateral development banks, in addition to good quality data.? Capacity-building of regulatory and supervisory institutions would help promote a safe environment for climate finance.

The Fund’s Resilience and Sustainability Trust was considered extremely valuable in the provision of long-term funding for countries with no access to concessional loans. Another important tool is the Climate-Public Investment Management Assessment (C-PIMA), which is used to assess countries’ capacity to manage climate-related infrastructure.

The final session discussed the advent of digitalization and featured the experiences of Botswana, where the central bank is using machine learning for nowcasting, and Ghana, where a bank-led model for mobile money helped reduce disruptions to the banking sector. Panelists highlighted how it is critical to understand the needs of the customers when covering financial inclusion and how gathering and analyzing data was an integral part in the digital transformation journey.

Overall, the conference highlighted the broad-based challenges faced by SSA economies against the backdrop of multiple shocks. In this context, CD, including from the field, proved essential to build resilience and further the growth agendas in the region. Coordination of CD activities in addressing cross-cutting issues such as climate change, digitalization, and governance remains key.?

For the past ten years, ATI has delivered quality training and adapted to different challenges, including the pandemic. ATI stands committed to providing high-quality support and collaborate with other institutions to serve the needs of its members.

Development Partners

ATI acknowledges the significant contributions from the host country, Mauritius, member countries, and development partners.?ATI would also like to thank several member countries which have pledged to provide financial contributions to ATI Phase II: Angola, C?te d’Ivoire, Guinea, Republic of Congo, Senegal, Sierra Leone, and Togo.