Marrakesh Meetings: Raising Funds to Curb Poverty, Allocating New Seat for Africa

[From left to right] Deputy Director of the IMF Gita Gopinath, IMF Director Kristalina Georgieva, and Acting Spanish Minister of Economy, Nadia Calvino, in a session at the Fund’s meetings in Marrakesh, October 14, 2023. (AP)

Two positive points can be taken from the annual meetings of the International Monetary Fund and World Bank in Marrakesh: The first is the success in raising the needed amounts for the Poverty Reduction and Growth Trust Fund (PRGT), which allows it to continue financing low-income countries with interest-free loans, and the second is the allocation of a new seat for Africa.

Finance ministers, central bank governors, representatives of financial institutions, and thousands of participants attended the meetings in Marrakesh, which successfully hosted the event, despite the deadly earthquake that struck Al-Haouz region in early September, claiming the lives of thousands of people.

IMF officials pointed to several goals achieved at the conclusion of the meetings.

The first goal is for IMF member states to agree to complete the Chapter 16 review with a significant increase in quotas in order to make the Fund financially strong in terms of its ability to move forward, in the event that the world is exposed to another shock.

Spanish Economy Minister Nadia Calvino, who chairs the IMF Financial Committee, said at a press conference 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.

In this regard, IMF chief Kristalina Georgieva said: “Demand for Fund support from low‑income countries and vulnerable middle‑income countries is at a record high. To be able to provide meaningful support, we need more resources for our Poverty Reduction and Growth Trust, especially subsidy resources, so we can provide zero interest rate loans.”

Calvino noted that an agreement was reached on “our common priorities‑‑to safeguard financial stability, to reduce inflation, to ensure fiscal sustainability, while protecting the most vulnerable.”

She added: “There is also agreement on a meaningful increase of quotas by the end of the year, at least maintaining the size of the Fund. And this is a key to put on track a quota‑‑a strong, quota‑based, and adequately resourced IMF that can ensure financial stability but also better support the most vulnerable countries.”

Calvino also announced an agreement to give sub-Saharan Africa a third seat on its executive board at its first meetings in the continent since 1973.