A Fund for the Future
The IMF successfully reached its target of raising
SDR
billion
for PRGT loan resources.
Given its location at the northern point of the continent, with the youngest and fastest-growing population, the choice of Marrakech for the October 2023 IMF–World Bank Annual Meetings was appropriate for the eve of the 80th anniversary of the founding of the Bretton Woods institutions (see Box 1.2). The IMF is marking its history, but it is also firmly focused on the future.
Agreements on governance and financing reached in Marrakech testify to the membership’s determination to shape an IMF that meets not only the needs of members today, but also those in the future.Over the past year, the IMF has continued to evolve to better serve its members, further adapting its lending, policy advice, and capacity development to help countries respond to shifting global conditions.
The IMF harnesses the power of multilateralism, in partnership with the World Bank, to achieve its goals, as illustrated by the “Marrakech Principles for Global Cooperation” issued jointly with the World Bank and top Moroccan officials at the end of the meetings.
To better reflect the makeup of the global economy, and following a recommendation by the IMF’s Executive Board, in December the IMF Board of Governors approved an increase in IMF quotas under the 16th General Review of Quotas. Once member countries give their consent to this decision, which in many cases involves legislative approval, IMF members’ quotas will increase by 50 percent (SDR 238.6 billion, or $314 billion), bringing total quotas to SDR 715.7 billion ($943 billion). When the quota increase becomes effective, it will reduce the Fund’s reliance on borrowed resources with no reduction in its lending power—critical for a strong, quota-based, and adequately resourced IMF. Looking ahead to the 17th General Review of Quotas, the Board of Governors called for work to develop, by June 2025, possible approaches as a guide for further quota realignment, including through a new quota formula.
Another important milestone reached in Marrakech was the achievement of the 2021 fundraising targets for the Poverty Reduction and Growth Trust (PRGT). Ahead of the Annual Meetings, and with the support of 17 members, the IMF successfully reached its target of raising SDR 12.6 billion ($17 billion) for PRGT loan resources. Additional pledges received around the time of the Annual Meetings yielded about SDR 14.7 billion under the 2021 fundraising round, exceeding the target by a wide margin.
In addition, in Marrakech, the target of SDR 2.3 billion ($3 billion) for PRGT subsidy resources was also met, thanks to the support of more than 40 PRGT partners. This is an important first step to help ensure that the PRGT can continue providing financing at zero interest to the poorest and most vulnerable members. (For more information on the PRGT, see “Spotlight 3: Lending and Debt Revisited.”)
Given their macro-critical impact, climate considerations are increasingly mainstream in the IMF’s work—through macroeconomic and financial policy advice but also through its lending. The IMF’s Resilience and Sustainability Trust (RST) provides longer-term, affordable financing to help members address structural challenges arising from climate change and pandemic preparedness.
In May 2023, the Executive Board also approved the introduction of an interest rate cap for the RST’s lowest-income borrowers (Group A countries) following the first ever review of the adequacy of RST resources. As of the end of April 2024, 18 arrangements, amounting to the tune of SDR 6.3 billion had been approved for financing from the RST under the Resilience and Sustainability Facility. In addition, the IMF received contributions from eight members to add SDR 1 billion across the RST's deposit and reserve accounts during the year ending April 30, 2024. New commitments to the loan account from six members during the year ending April 30, 2024, totaled SDR 4.4 billion. The new agreements added critical resources that support the continued smooth operations of this lending vehicle.
Both the PRGT and the RST received a financing boost after the G20 achieved its goal of SDR channeling of $100 billion from stronger members to those in greater need.The Executive Board’s consideration of the ex post report on the 2021 $650 billion SDR allocation concluded that it had benefited the global economy and its members.
In Marrakech, there was also a boost to the IMF’s governance and representation with the announcement of a 25th chair on the IMF Executive Board — a third chair for sub-Saharan Africa. IMF research predicts that much of future global economic growth will come from emerging market and developing economies. This decision helps ensure that the IMF will continue to remain representative of its diverse membership and was accompanied by an additional commitment to increase gender diversity on the Board.
In order to effectively meet future needs, it is essential to identify where those needs lie. The IMF’s participation in the G20 Data Gaps Initiative (DGI-3) demonstrates the IMF’s role in the provision of data and information to support effective policies. This multilateral initiative aims to close critical data gaps in the areas of climate change, financial innovation, and inclusive growth with the objective of ensuring regular collection and dissemination of reliable and timely statistics for policy use.
