The International Monetary Fund (IMF) announced on Saturday that member nations had agreed to increase their contributions to the global lender and give sub-Saharan Africa a third seat on its executive board at its first meetings on the continent since 1973.
Boosting the IMF's quota resources and giving Africa a bigger voice within the institution were among the priorities of the week-long talks of the IMF and World Bank in Marrakech, Morocco.
Spanish Economy Minister Nadia Calvino, who chairs the IMF Financial Committee, said at a press conference that there was "agreement on a meaningful increase of quotas by the end of the year."
The quotas, which are based on the size of a country's economy, determine how much funding a nation should provide to the IMF, its voting power and the maximum amount of loans it can obtain.
IMF chief Kristalina Georgieva and World Bank President Ajay Banga used this week's meetings to urge members to step up funding so their institutions can better support nations hit by poverty and climate change.
The conflict between Israel and Palestinian militant group Hamas has raised concerns about its impact on already weak global economic growth in the wake of the Ukraine war, elevated inflation and high interest rates.
Georgieva said the agreement on quotas was "very heart-warming."
The goal, she said, was "to make the fund strong financially in terms of our ability to step up should we be hit by yet another shock."
Asked when the IMF will change its voting shares, Georgieva said: the "membership has agreed that this is going to be the next step and that there will be a clear pathway and plan to go there."
Giving countries like China, which is now the world's second-biggest economy, a larger voting share has been a controversial issue.
China has a 6.08% share of votes compared to 6.14% for Japan, the third global economy.
"At some point, a revision of the IMF's quota distribution will be inevitable," French central bank governor Francois Villeroy de Galhau said in Marrakesh on Wednesday.
"But the emerging countries that will benefit from this - including China- will have to accept common rules of the game," he said.
While voting shares were not changed, the IMF agreed to expand its executive board from 24 to 25 members to give Africa another seat.
Sub-Saharan Africa will now have three executive board members instead of two.
The move, which will be effective next year, does not increase Africa's voting power within the international lender, whose main shareholders are the US, China, Japan and western European powers.
For some African officials, a good start would be erasing the mountain of debt that is forcing many countries to spend much of their revenue on paying back interest.
The economy minister of Ivory Coast, Adama Coulibaly, who heads the G24 group of developing countries, said most of the debt is owed to multilateral development banks and the IMF.
"We are warning against a debt crisis that could stifle durable and inclusive growth," Coulibaly said.
More than 20 African countries are either already in or on the edge of debt distress.
In some countries, more than 40% of the state budget goes to servicing the debt -- an unsustainable level in countries that need to maintain basic public services such as water and electricity.
But negotiations to restructure debts have become more complicated over the years as new creditors such as China, Saudi Arabia and Brazil have emerged, in addition to private lenders.
Now countries must negotiate terms with China and the Paris Club of creditors, which mostly comprises Western nations with very different policies to Beijing.
AFP