IMF Introduces New Package for the Poorest of the Poor

The International Monetary Fund (IMF) on Monday announced a new package of lending facilities to the world’s poorest nations. The facility according to the fund, is the biggest revamp of its support for low-income countries in two decades. The measures, which became effective on 7th January, will boost lending resources, raise borrowing limits, eliminate interest payments for two years, and offer more flexible terms tailored to country circumstances.

Adopted in July 2009, when the IMF’s Executive Board approved the new lending facilities. Activation of the measures was conditioned on consent by lenders and subsidy contributors to the financing mechanisms supporting the new facilities. This process was said to have been completed on 7th January, the IMF said.

An IMF report on the implications of the global financial crisis for low-income countries had warned in March 2009 that the global crisis has hit poor countries especially hard, posing serious threats to their hard-won gains in boosting economic growth and creating a need for additional foreign financing to mitigate the impact of the crisis. Also in 2009, at an IMF-convened conference in Dar es Salaam of government, business, civil society, and opinion leaders to address these issues, the IMF committed to increase its support for Africa. It pledged more financing, greater flexibility, enhanced policy dialogue, and a further strengthening of Africa’s voice in the Fund. The Gambia, whose Poverty Reduction and Growth Facility will be among those upgraded to the Extended Credit Facility arrangement, is among those poor countries that stand to gain from the new package.