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2007 African Caucus Meeting - Maputo, Mozambique
30 July 2007
African Governors of the Bretton Woods Institutions (BWIs) held a two-day meeting of the African Caucus in Maputo, Mozambique, from July 30 - 31, 2007. The meeting was chaired by Honorable Manuel Chang, Minister of Finance of Mozambique.
Governors expressed concern about the on going quota reforms in the Fund, the continued erosion of voice of African countries in the decision making process in the BWIs, and the poor staff representation of Africa at all levels.
Governors noted some progress in the implementation of the September 2006 Singapore Resolution, which aims at not only providing a simpler and more transparent quota formula that captures members’ relative positions in the global economy, but also at enhancing the voice and participation of LICs, including increasing basic votes in a manner that will preserve their voting shares. They noted the efforts made so far by the IMF Executive Board on a new quota formula. Governors emphasized that it is important for members to reach a consensus on a new quota formula that will preserve the legitimacy and cooperative spirit of the Fund, and at least maintain the current quota status of the continent.
Governors noted the steps taken by the Fund Executive Board to increase staff resources for offices of Executive Directors representing a large number of countries, including the two Sub-Saharan Africa constituencies. They expressed disappointment that the Board did not implement the decision made to increase the number of Senior Advisors in the African Executive Directors offices. In addition, Governors were concerned that the process of amending the Fund’s Articles of Agreement to provide for additional Alternate Executive Directors for large constituencies like the African constituencies was proceeding slowly. In this connection, they called upon the Executive Board of the Fund to fully implement all the decisions made and agreements reached by Governors.
Governors noted the unexpected decision of Mr. De Rato, the current Managing Director of the Fund, to resign from the Fund. Accordingly, they called for a transparent and open process for the selection of a new Managing Director based on merit in order to improve the legitimacy and credibility of the institution.
Governors welcomed the efforts and contributions being made by the international community and the BWIs in supporting their development agenda. However, they were deeply concerned that previous important commitments, such as those made in the Gleneagles Summit and in Monterrey, have not been fully met, while ODA continues to decline in real terms. They therefore called for further progress in this regard, and in particular in transforming financial commitments into actual flows and urged the BWIs to play a catalytic role in this front
Governors emphasized that a successful IDA 15 replenishment constitutes an essential prerequisite for mobilizing resources needed to finance the MDGs. They underscored the need for a replenishment that would be sufficient to realize the promised “dollar-for-dollar” compensation of resources used in the MDRI, funding the shortfall in the HIPC trust fund, and fully financing the structural gap in IDA 14.
Governors welcomed the changing aid architecture and the increase in the number of aid partners. They, however, called upon the BWIs to demonstrate leadership in the implementation of the Paris and Rome Declarations on aid effectiveness, alignment and harmonization.
Governors underscored the huge infrastructure deficit that is constraining growth in Africa. Accordingly, they urged the BWIs to show greater flexibility in their policies, including allowing additional fiscal space, and supporting private-sector-led growth in Africa.
Governors also noted the divergence and escalation of infrastructure costs in African countries and urged the World Bank to develop and publish cross-country infrastructure unit costs so as to help member countries achieve value for money in infrastructure procurement. Governors further requested the Bank to consider waiving of commitment charges on loans.
Governors urged the BWIs to assist the middle income countries in Africa in accessing concessional financing, in reducing the cost of doing business in these countries, in expanding the use of country systems, and in managing their debts. They also encouraged the BWIs to develop innovative instruments for financing low income countries under stress and countries under conflict.
Governors urged the BWIs to fully normalize their relations with countries with protracted arrears. They asked the BWIs to expeditiously and flexibly assist the rest of SSA countries which have not yet reached the decision/completion points in order to allow them to benefit from the MDRI.
Governors urged the Heads of the BWIs to devise appropriate means for an enhanced and strengthened interaction between them and the African Governors, beyond the submission of the memorandum and the traditional short meeting during the Annual Meetings.
Finally, Governors expressed their gratitude to the President, Government and People of Mozambique for the warm hospitality and excellent facilities that made this meeting successful. They also expressed appreciation to the Chairman for his exemplary leadership during the meeting.
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