IMF announces $17bn to assist poor countries

The International Monetary Fund (IMF) has announced plans to raise $17 billion in extra funding to assist very poor countries presently challenged by the global financial crisis.

The IMF wants to sell some 403 metric tonnes of its gold reserves to raise the needed funds.

The proceeds from the sale, according to the IMF Managing Director, Dominique Strauss-Kahn, will boost its concession lending to the poorest countries in sub-Saharan Africa and all over the world over the next five years.

Some $8 billion of the amount is expected to come through in the next two years. Mr Strauss-Kahn announced this during a briefing of selected journalists in three African countries including Ghana via a video conference from Washington. He explained countries needed to put in special requests to access the fund.

In addition, the IMF announced zero interest payments on outstanding concessional loans through end-2011 for all low-income members. A new set of lending instruments will underpin this increased support.

“This is an unprecedented scaling up of IMF support for the poorest countries, in Sub-Saharan Africa and all over the world,” said IMF Managing Director Dominique Strauss-Kahn. “The G20 asked the Fund to help respond to the global economic crisis, which has hit the low-income nations so hard, and we are responding with a historic set of actions in terms of support for the world's poor. The new resources and new means of delivering them should help prevent millions of people from falling into poverty.”

As part of its response to the global economic crisis, the IMF has more than doubled its financial assistance to low-income countries. The new measures represent a significant additional effort in the coming years. The IMF support package includes:

Scaled-up concessional financial assistance to low-income countries to boost the Fund's concessional lending capacity by up to $17 billion through 2014, including up to $8 billion in the first two years. This exceeds the G20 call for $6 billion in new lending over two to three years.