The International Monetary Fund (IMF) announced on Saturday, October 14 that member nations have agreed to increase their contributions to the global lender and give sub-Saharan Africa a third seat on its executive board at its first meeting in Africa since 1973.
During talks by the IMF and World Bank in Marrakech, Morocco this week,both lenders said boosting the International Monetary Fund’s quota resources and giving Africa a bigger voice within the institution were among it’s priorities.
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Spanish Economy Minister Nadia Calvino, who chaired the IMF Financial Committee, said at a press conference on Saturday, that there was “agreement on a meaningful increase of quotas by the end of the year.”
The quotas, which are based on the size of a country’s economy, determine how much funding a nation should provide to the IMF, its voting power and the maximum amount of loans it can obtain.
IMF chief Kristalina Georgieva and World Bank President Ajay Banga used this week’s meetings to urge members to step up funding so their institutions can better support nations hit by poverty and climate change.
Georgieva said the agreement on quotas was “very heartwarming.”
The goal, she said, was “to make the fund strong financially in terms of our ability to step up should we be hit by yet another shock.”
Asked when the IMF will change its voting shares, Georgieva said: the “membership has agreed that this is going to be the next step and that there will be a clear pathway and plan to go there.”
Giving countries like China, which is now the world’s second biggest economy, a larger voting share has been a controversial issue.
China has a 6.08 percent share of votes compared to 6.14 percent for Japan, the third global economy.
“At some point, a revision of the IMF’s quota distribution will be inevitable,” French central bank governor Francois Villeroy de Galhau said in Marrakesh on Wednesday.“But the emerging countries that will benefit from this — including China — will have to accept common rules of the game,” he said.
While voting shares were not changed, the IMF agreed to expand its executive board from 24 to 25 members to give Africa another seat.
Sub-Saharan Africa will now have three executive board members instead of two.
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“I will finish with what warmed my heart the most: uniform support for a third African chair on our executive board,” Georgieva said.
“That is so important for meetings that take place on African soil,” she said“Despite all the difficulties I can only praise our members for finding this pathway to solidarity on which hundreds of millions of people depend.”
