The International Monetary Fund (IMF)’s Executive Board recently approved a temporary Food Shock Window (FSW) to help vulnerable countries cope with food shortages and rising costs stemming from Russia’s war in Ukraine.
Kristalina Georgieva, managing director, IMF said in a statement on the IMF website that for some time the combination of climate shocks, the pandemic and regional conflicts had disrupted food production and distribution, driving up the cost of feeding people and families.
She added that the Russia-Ukraine crisis hiked the price of food and fertilisers – consequently, no less than 345 million people’s lives and livelihoods are in immediate danger from acute food insecurity.
These are some of the things that birthed the programme and below are five major things to know about it.
First: The FSW is part of the IMF’s emergency financing instruments (Rapid Credit Facility-RCF/Rapid Financing Instrument-RFI) and will be open for one year, starting from the date it was approved by the board. Its impact will be reviewed by the end of June 2023.
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Second: It is open to member countries that have urgent balance of payment needs due to acute food insecurity, a sharp increase in their food import bill, or a shock to their cereal exports.
Third: The FSW will temporarily increase existing access limits and allow all member- countries to borrow up to an additional 50 percent of their IMF quota under the Rapid Financing Instrument, with low-income countries able to tap the Rapid Credit Facility.
Fourth: Access to the FSW program will be subject to its debt sustainability and its adequate capacity to repay requirements. Furthermore, member countries accessing the window would also be expected to commit to measures ensuring transparency and accountability in spending the emergency resources.
Lastly, according to the IMF, there are concerns that some countries may not be able to access the window due to their inability to meet the requirements, hence staff members are encouraged to work with countries to help address the challenges they are facing in meeting those requirements.
