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The International Monetary Fund and the German government have signed a letter of understanding to support the IMF’s capacity development efforts aimed at helping African governments modernize their economic policies and institutions. According to a statement released by the Fund on Friday, the German Ministry of Finance will provide €15 million in support of the IMF’s capacity development activities across Africa in the context of the G-20 Compact with Africa.

Christine Lagarde, IMF’s Managing Director, and Wolfgang Schäuble, Germany’s Federal Minister of Finance, signed the agreement today on behalf of their organizations at the IMF’s headquarters in Washington D.C.

“I want to commend the German government for making the Compact with Africa a G20 priority this year,” Lagarde said. “This compact has the potential to mobilize investment and energize inclusive economic growth in Africa. The IMF greatly appreciates the support of the German government for our capacity-building efforts in Africa and we are very pleased to participate in this important initiative.”

The IMF’s capacity development activities help African policymakers address reform challenges in areas such as strengthening domestic resource mobilization, implementing fair tax systems, achieving good financial governance, and fostering financial stability and inclusion, all in support of the 2030 Agenda for Sustainable Development.
 
Five countries are initially joining the Compact with Africa. They are: Cote d’Ivoire, Morocco, Rwanda, Senegal, and Tunisia. Another group of countries are expected to join later this year, the IMF said.
 
“Capacity development is important to improve conditions for private investment in Africa,” Schäuble said. “This is why we support the IMF's very valuable efforts both financially and conceptually.”