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Russia-Ukraine war: Africa vulnerable to higher food and fuel prices, says IMF

Author:
Wasilat Azeez

The International Monetary Fund (IMF) says the ongoing crisis in Ukraine threatens to undo Africa’s post-COVID-19 economic recovery.

Kristalina Georgieva, IMF managing director, said this after a meeting with African ministers of finance, African central bank governors, and representatives from the United Nations Economic Commission for Africa (UNECA) to discuss the impact of the crisis in Ukraine.

Georgieva said African countries are poised to feel the pain of rising food and fuel prices.

“The war in Ukraine is devastating the lives of millions of people and severely affecting the Ukrainian economy. The war and the unprecedented sanctions imposed on Russia are having far-reaching consequences. They come at a delicate time for Africa,” Georgieva wrote in a statement on Thursday.

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“Just as the global economy and the continent are beginning to recover from the ravages of the COVID-19 pandemic, this new crisis threatens to undo some of that progress.

“We discussed how to sustain Africa’s recovery — already lagging other regions — despite significant new obstacles.

“Africa is particularly vulnerable to impacts from the Ukraine war through four main channels — increased food prices, higher fuel prices, lower tourism revenues, and potentially more difficulty accessing international capital markets.”

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Georgieva said she was encouraged by the strong interest from African policymakers in continuing dialogue on policy responses.

She said the IMF is willing to help African countries mitigate the effects of the Russia-Ukraine conflict.

“I noted, in particular, significant concerns about the limited domestic policy space to sustainably address the ongoing crises,” the IMF boss said.

“Redoubling efforts to advance reforms that further promote resilience is a priority for many countries.

“At this difficult moment, the Fund stands ready to help African countries address the repercussions of the war and to help design and implement reforms through our policy advice, capacity development, and lending.

“Recent reforms to the Fund’s lending toolkit provide greater flexibility to help meet financing needs.

“I was also pleased by the ongoing strong interest from African countries in the proposed Resilience and Sustainability Trust, which we plan to have fully operational by the end of this year.”

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