NAIROBI, Kenya Nov 2 – G20 Ministers have called for urgent reforms in Multilateral Development Banks (MDBs) and global debt structures for increased support to African countries most hit by climate change and economic instability.
The finance ministers approved a roadmap for MDB reforms aimed at strengthening these institutions to address global crises, particularly for developing nations.
An interim report commissioned by the governments of Kenya, Colombia, France, and Germany revealed a worsening cycle of climate shocks across the African continent, leading to high borrowing for recovery efforts.
The report urged an overhaul of the World Bank and International Monetary Fund’s (IMF’s) Debt Sustainability Frameworks, designed to better account for the growing intersection of debt, climate, and environmental crises.
It noted that widening financial gaps is challenging African countries efforts to combat the escalating climate crises.
“This critique underscores the need for stronger, more specific commitments to support African nations in the transition to a climate-resilient future. Despite these critical issues, concrete solutions remained limited.”
TheIMF is seeking to introduce a third chair for Sub-Saharan Africa starting November 1, 2024, a decision that enhances the region’s voice within the institution marking progress toward governance reforms t by developing nations.
In its recently released report dubbed “A Green and Just Planet,” the G20’s Task Force on Climate and Financial Policy (TF-CLIMA) called for a coordinated global effort to limit global warming to 1.5°C.
The task force also emphasized that high-income countries must lead financing to support lower-income nations’ transitions to achieve climate resilience and adoptions.
“While the TF-CLIMA report lays out key priorities, African leaders and advocates pointed out diluted ambitions among G20 leaders, especially regarding financial commitments essential to climate action on the continent.”
The International Monetary Fund (IMF) last month approved a disbursement of Sh78 billion (US$605 million) to assist Kenya in bolstering its fiscal and external buffers and enhancing resilience to climate-related shocks.
The decision was part of the seventh and eighth reviews under the Extended Fund Facility (EFF) and the Extended Credit Facility (ECF) arrangements, alongside a review under the recently established Resilience and Sustainability Facility (RSF).
The EFF and ECF programs originally approved in April 2021 aim to address Kenya’s debt vulnerabilities while ensuring adequate resources for essential social and developmental needs.
The RSF, approved in July 2023, specifically targets climate challenges, seeking to catalyze private climate finance.
