By: Mathias Hangala
The International Monetary Fund (IMF) has announced it will offer zero-interest loans to support Africa’s climate resilience and pandemic preparedness, as part of broader efforts to bolster long-term development on the continent.
This announcement was made during the 2025 IMF-World Bank Annual Meetings in New York, held last week.
In a joint statement, Hervé Ndoba, the Central African Republic’s Minister of Finance and Chair of the African Caucus, and Kristalina Georgieva, IMF Managing Director, said that the recently approved reforms to the Poverty Reduction and Growth Trust (PRGT) have significantly strengthened the Fund’s ability to provide concessional lending.
According to the IMF, new loan commitments under this program are projected to average N$1.23 trillion annually, with the poorest IMF member countries now eligible for zero-interest loans. Ndoba and Georgieva said that IMF’s Resilience and Sustainability Trust (RST) is also expected to play a role by offering longer-term, affordable financing aimed at helping countries address structural challenges, improve pandemic preparedness, and build climate resilience.
To date, 26 RST programs have been approved—nearly half of them being in Africa. The IMF and African Caucus have called for continued efforts to ensure the PRGT and RST are adequately resourced to meet the region’s growing demands.
“Today, African ministers and governors of the Bretton Woods institutions convened with IMF management to take stock of current economic conditions and chart a course forward for the continent,” the joint statement read.
According to the two bodies, despite resilience, the economic outlook remains uncertain. The global economy is projected to slow from 3.3% in 2024 to 3.2% in 2025, driven by rising protectionism, policy uncertainty, and geopolitical tensions. Meanwhile, tight global financing conditions and inflation pressures continue to strain fiscal positions across many African economies, compounding the impact of climate shocks.
The IMF, an institution of over 100 member states, commits itself to the promotion of global monetary co-operation, secure financial stability, facilitating international trade, and fostering sustainable economic growth. The United States remains the largest shareholder in the Fund. Namibia, for instance, acquired an IMF loan of N$3.9 billion in 2021 to respond to the economic downturn caused by the COVID-19 pandemic. As of March 2025, it was widely reported that N$165.9 million of that loan remained outstanding.
With ongoing trade wars, Africa’s economic growth is expected to slow down in 2025 as a result of rising inflation. Amid increasing economic uncertainty, Namibia’s central bank responded by lowering the repo rate to stimulate growth.
“Challenges remain in many low-income countries (LICs), interest payments consume about 15% of government revenues, and access to external financing is limited by high borrowing costs and declining official development aid. Fragile and conflict-affected states continue to face acute vulnerabilities, and per capita incomes in several countries have yet to return to pre-pandemic levels,” shared Ndoba and Georgieva.
They added that the African Caucus reaffirmed its commitment to maintaining macroeconomic and financial stability, while focusing on policies that improve living standards through access to social services, job creation, and sustainable development.
Moreover, they said strengthening domestic resource mobilisation remains a core priority. African leaders aim to improve public financial management, boost fiscal transparency, and enhance accountability. Measures like digitising tax systems, broadening tax bases, and improving spending efficiency are expected to expand revenue and optimise the impact of public resources. Structural reforms are also underway to boost private-sector development, increase trade integration, and generate employment.
“Building resilience to climate shocks is essential, as extreme weather events are already reducing output by 1–2 percentage points annually in the most vulnerable economies,” the statement added.
Meanwhile, speaking on the sidelines of the summit, African Development Bank Group President, Sidi Quid Tah, said the bank is committed to a shared vision of deepening collaboration on key strategic priorities such as domestic resource mobilisation, credit rating readiness support to member states, and regional value development geared towards accelerating Africa’s sustainable growth and economic transformation.
