IMF hosts 12th African Fiscal Forum

The 12th African Fiscal Forum, jointly organized by the International Monetary Fund (IMF) and the European Commission, saw ministers and senior officials from Sub-Saharan Africa focusing on regional development goals. The forum addressed crucial issues such as investment in infrastructure, health, education, climate adaptation, and energy transition. Vitor Gaspar, the Director of the Fiscal Affairs Department at the IMF, emphasized the urgent need for spending cuts and adjustments in various sectors to address the high demands for investment. Gaspar highlighted the importance of eliminating harmful fossil fuel subsidies, citing Angola's subsidy reform and Kenya's efforts in that direction. He also discussed innovative financing solutions like asset recycling and asset-based securities to unlock opportunities amidst financial challenges. Gaspar underscored the significance of domestic revenue mobilization, pointing out that African countries collect an average of 13% of GDP in revenues, significantly lower than the 27% collected by advanced economies. He stressed the crucial role of strong fiscal institutions and capacity-building initiatives to enhance revenue collection and economic development. Juguna Dungu, the Minister of Finance of Kenya, acknowledged the significant fiscal pressures and challenges faced by African countries due to multiple shocks like COVID-19, unemployment crisis, and climate-related disasters. Dungu highlighted Kenya's efforts to manage debt levels and enhance tax collection to support development initiatives. The forum also featured contributions from Minister Vera Daves-Dos Santos of Angola, who discussed Angola's strategies to reduce spending, promote the business environment, and strengthen government institutions to address rising debt. Koen Doens, Director-General for International Partnerships at the European Commission, emphasized the importance of building medium-term fiscal strategies and managing debt carefully. Furtie in Zia Sani, Executive Director of Oxfam in Africa, called for African agencies to take proactive steps in addressing debt challenges and stimulating economic activities within their countries. The discussions underscored the need for African governments to mobilize domestic resources, enhance revenue collection, and strengthen fiscal institutions to drive economic growth and sustainability.