Nigeria and other African countries should take advantage of the $40 billion Resilience and Sustainability Trust Fund (RSTF) to tackle climate crisis, the International Monetary Fund (IMF) has counselled.
Its Managing Director Kristalina Georgieva, who gave the advice in her keynote address at the Global Center on Adaptation’s Africa Adaptation Summit, identified the continent as the worst hit by the consequences of climate change despite contributing the least to the crisis.
The IMF boss noted that African leaders now demonstrate commitment to advancing climate adaptation.
Georgieva said: “The IMF today is a systemically significant institution in the fight against climate change. We integrate climate in our policy analysis, policy recommendations, and in our financial sector assessments. We integrate it in our public investment management assessments.”
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According to her, the IMF has a financing instrument to put its money where its mouth is – the Resilience and Sustainability Trust.
“It is now $40 billion strong. Our mission is to use this money to support countries to unleash the potential of private finance. So, my dream is for the $40 billion to generate $400 billion in financing for adaptation and mitigation in our member countries,’‘ she said.
Georgieva explained that in countries that are high emitters, the focus is mitigation, adding that the more countries mitigate, the less they have to adapt.
She said: “In climate-vulnerable countries, the focus is on adaptation – and I’m proud that we have many countries from Africa who are thinking of tapping into this instrument.
“This is the first instrument at the IMF with a long maturity (20 years) and a long grace period (10.5 years). We hope to advance quickly with several of these African countries, as we now have this financial capacity to be a force for good on adaptation”
“And, of course, we endorse the African Adaptation Acceleration Plan, and we will work to make sure that we are aligned. Cooperating with others is a ‘must’ if we are to succeed. To conclude, for far too long, we saw care for the environment as a burden.
“But we are here today because we know better. This planet is our only home, and nature is the main provider of what life depends on.
“Protecting our climate and adapting to the changes we have caused is existential for the future of humanity. And if we do it right, it can be a source of new economic opportunities, create jobs, and improve living standards.”
According to her, the world is being faced with a cost-of-living crisis.
She said: “A war in Europe – Russia’s invasion of Ukraine – has had an impact, fast and far. And the climate crisis has hit hard in many places this year – if anyone still held the belief that we could duck and let it pass over our heads, they now know differently. It is dramatic and it is set to be even more serious in the future.
“There are two lessons we draw from the context today. One – that we are living in a more shock-prone world, and we must be mindful that unexpected events can disrupt our plans.
“Second, we learned that global cooperation is fragile and that the risk of fragmentation is serious. And at a time when we need each other more than ever, it is harder to come together for collective action. Yet, we must.”
Georgieva explained that in many countries, fiscal space is gone, and the debt situation for 25 percent of emerging markets is no longer sustainable.
“Just think of Sri Lanka and many countries that are in a similar position. We even see a country with strong fundamentals like Ghana in a situation where it is harder to access markets because of exogenous shocks. And among poorer countries, over 60 percent are in or at risk of debt distress,” she said.
On the importance of embracing the resilience concept for Africa, she said: “The IMF has a very important task: macroeconomic and financial stability, growth, and employment. We can no longer deliver on this mission unless we embrace this comprehensive concept of resilience.
“That means we must look at social protection and social spending in our member countries and make sure it is protected. That means we must look at investment decisions and be confident they are resilient.”
