African Development Bank Commits US$7.5 Million to Support IMF Capacity Building in AfricaSeptember 25, 2011
The International Monetary Fund (IMF) and the African Development Bank (AfDB) today signed an agreement for a contribution of US$7.5 million by the AfDB to support IMF capacity building in Africa through the third phase of the Africa Regional Technical Assistance Centers (AFRITACs) Initiative.
“The IMF’s regional centers are widely considered as models for effective capacity building in Africa, and we are delighted to take our cooperation with the African Development Bank to a new level,” Nemat Shafik, Deputy Managing Director of the IMF, said after signing the agreement at a ceremony in Washington D.C. during the IMF’s Annual Meetings. “The AfDB has been a strategic partner and lead donor since the inception of the AFRITAC Initiative in 2002 and has become a pivotal partner in its implementation. The AfDB’s renewed and increased contribution marks a new stage in the AfDB’s support to the AFRITACs and facilitates the expansion of the initiative. We are grateful for the AfDB’s continued support and look forward to further strengthening our cooperation,” Ms. Shafik said.
The AFRITACs assist recipient countries in their efforts to strengthen financial governance and build effective institutions. The areas in which AFRITACs are providing assistance are critical to strengthening public finances and reducing poverty, including debt and revenue management, and tax reform. They also support regional integration and provide a platform for donor coordination.
The AfDB has been supporting the AFRITACs initiative since its inception. The Bank contributed a total of US$6 million to three AFRITACs between 2002 and 2009. This included US$3 million for the first phase (2002–05), which established two pilot Centers in East and West Africa, and US$3 million to cover their second phase (2006-09) as well as the establishment of AFRITAC Central.
“The global economic and financial crisis as well as continued vulnerabilities of African countries make the policy advice and technical assistance provided through the AFRITACs even more relevant today,” said Mr. Aloysius Uche Ordu, Vice President, Country and Regional Programs at the AfDB, after signing the agreement. “By contributing to the new phase of the AFRITACs Initiative, the AfDB sets the stage for enhanced support to Africa’s efforts to improve macroeconomic and financial management and governance through the provision of well targeted technical assistance and the building of institutional capacities”.
Demand for IMF technical assistance has risen in light of the global economic and financial crisis, but also because countries are seeking to strengthen their institutions. At the same time, the Fund is moving forward with a broad range of measures to respond more effectively to its members’ needs to deal with emerging challenges in the global economy. To meet this rising demand as well as better coordinate assistance delivery, the IMF seeks to strengthen its partnerships with donors by engaging them on a broader, longer-term, and more strategic basis. As a part of these efforts, the IMF is expanding its network ofRegional Technical Assistance Centers. It now has four centers in Africa, plus centers in the Pacific, Middle East, Central America and the Caribbean.
The Africa Regional Technical Assistance Centers (AFRITACs) are part of the IMF’s Africa Capacity-Building Initiative launched in May 2002. Responding to calls from African leaders, the Initiative promotes strengthening the capacity of African countries to design and implement their poverty-reducing strategies, as well as to improve the coordination of technical assistance. As part of the Initiative, four centers have been established in Africa. AFRITAC East was opened in Dar Es Salaam, Tanzania, in 2002, and serves seven countries in East Africa. AFRITAC West was opened in Bamako, Mali, in 2003, and serves 10 countries in Francophone West Africa. AFRITAC Central was opened in Libreville, Gabon, in 2007, and serves nine countries in Central Africa. AFRITAC South started operations in June 2011 in Mauritius and covers 13 countries in Southern Africa and the Indian Ocean. Work is in progress to open a regional center in Ghana to cover non-Francophone countries in West Africa (AFRITAC West 2), which will complete coverage of all sub-Saharan countries through AFRITACs.
Complementing the regional perspective of the regional centers, topical trust funds provide technical assistance globally on specialized topics. A successful topical trust fund on Anti-Money Laundering/Combating the Financing of Terrorism was launched in May 2009. New topical trust funds on Managing Natural Resource Wealth, and on Tax Policy and Administration were launched in May 2011. Responding to the recent crisis, further topical trust funds are envisaged, including on debt management, training in Africa and financial statistics.