IMF Chief Says Africa Vulnerable to Higher Food Fuel Prices Due to Ukraine War

The International Monetary Fund’s chief warned that the war in Ukraine threatens to undo Africa’s progress in recovering from the damage of the Covid-19 pandemic and presents new challenges for the continent.

Africa is particularly vulnerable to the impact of the war through four main channels -- increased food prices, higher fuel costs, lower tourism revenues, and potentially more difficult access to international capital markets, IMF Managing Director Kristalina Georgieva said.

Policy makers at a meeting of African finance ministers and central bankers expressed concerns about their domestic policy space to address the ongoing crisis, Georgieva said in a statement on Thursday.

“A recalibration of policies appears inevitable in many countries,” Georgieva said. “At this difficult moment, the fund stands ready to help African countries reduce the cost of any needed policy adjustments through policy advice, capacity development, and lending. Recent reforms to the fund’s lending toolkit provide greater flexibility to help meet financing needs.”

The IMF in 2020 provided 13 times its average annual lending to sub-Saharan Africa and increased access limits to its zero-interest lending that comes mostly without the fund’s traditional conditions.