The International Monetary Fund (IMF) has called for multilateral cooperation on medicines and other essential supplies to help tame the COVID-19 pandemic.
SEE ALSO: Nigeria, U.S. Hold 5th Session of Bi-National Commission in Washington
The IMF made the call in its April 2020 World Economic Outlook released on Tuesday.
The IMF explained that addressing the coronavirus pandemic was therefore required significant multilateral cooperation, including avoiding trade restrictions particularly on medicines and other essential supplies with a view to help financially constrained countries with limited health care capacity.
It stated that such cooperation would help by providing such countries equipment and medical expertise financed through grants and zero-interest emergency loans.
“Countries confronting the twin crises of health and external funding shocks, for example, those reliant on external financing, or commodity exporters dealing with the plunge in commodity prices may additionally need bilateral or multilateral assistance to ensure that health care spending is not compromised in their difficult adjustment process.
“The IMF, with one trillion dollars in available resources, is actively supporting vulnerable countries through various lending facilities.
“The recent doubling of access limits of the IMF’s emergency financing facilities will allow the IMF to meet an expected demand of 100 billion dollars in emergency financing, provided through the Rapid Credit Facility and the Rapid Financing Instrument, of which the former is only for low-income countries.
“The Catastrophe Containment and Relief Trust can currently provide about 500 million dollars in grant-based debt service relief, including the recent 185 million dollars pledge by the UK and 100 million dollars provided by Japan as immediately available resources.
“Official bilateral creditors have been called upon by the IMF managing director and the World Bank Group president to suspend debt repayment from International Development Association countries that is, those with gross national income per capita below 1,175 dollars in 2020 that request forbearance.
“This would help with their immediate liquidity needs to address the challenges of the pandemic. Policies for the Recovery Phase Once the pandemic abates and containment measures are lifted, the policy focus will need to shift to rapidly moving to recovery, while scaling back special targeted measures deployed during the shutdown and ensuring debt overhangs do not weigh on economic activity.
“This will require efforts at the national level and continued strong multilateral cooperation. There is still substantial uncertainty on how long it will take for economic activity to normalise and the policy challenges will be much more severe in a scenario with more protracted dislocation from the pandemic” it explained.
The report indicated that securing a swift recovery, the lifting of containment measures was likely to be gradual, and even after containment measures were unwounded, economic activity might take a while to normalise.
It added that uncertainty about contagion could lead to persistent voluntary social distancing and subdued consumer demand for services and firms might only slowly start hiring workers and expanding payroll.