By Jean-Pierre
The International Monetary Fund projects an increase in funding support requests from Africa following recent US aid cuts and Donald Trump’s new tariffs on imports into the USA.
The IMF Has told the media, an increased number of African countries could request support to deal with the new US policies that have seen the world economic giant reduce funding to developing countries and other expenditures it deems unnecessary.
“We live in a shock-prone world,” Abebe Aemro Selassie, director of the African Department of the Washington-based lender, told reporters Tuesday in Senegal’s capital, Dakar. “The poorest and least resilient countries are increasingly turning to institutions like ours. I don’t rule out” more African countries seeking support, he was quoted by Bloomberg as saying.
The escalation of Trump’s tariff war to include nations on the continent comes after his USAID freeze earlier this year. Sub-Saharan Africa countries exported $29 billion of goods to the US in 2023, making it the region’s largest market after China, United Arab Emirates and India, reported Bloomberg.
According to the financial news outlet, the disruptive global environment for Africa, comparable to the shock imposed by the Covid-19 pandemic when many frontier-market countries lost access to the international capital market, is already hammering African eurobonds.
Bond yields of leading economies such as Nigeria, Kenya and South Africa have surged, driven by a selloff of riskier assets. The premium investors demand over US Treasuries to hold African instruments has widened to 660 basis points from 530 since the reciprocal tariffs were announced, according to JPMorgan Chase and Co. indexes.
The IMF has already taken steps to boost its resources to help low-income countries, Selassie said on Tuesday.
The financial institution revealed other developed economies could soon reduce financing to developing countries
“It’s not just the US, other countries have indicated that they will be less able to provide support in the future,” he said. “This places an even greater responsibility on African nations to come up with strategies to offset these challenges.”
