IMF lending to Africa set to double: official

By Lesley Wroughton

WASHINGTON (Reuters) - Lending by the International Monetary Fund to Africa is set to double this year as the region is gripped by the global economic crisis and more countries need aid, senior IMF officials said on Monday.

The IMF has seen a sharp rise in demand for its loans from African countries this year as their balance of payments are hit by a sharp drop in revenue from exports, volatile commodity prices and falling foreign investment.

In the first five months of this year the IMF has committed about $1.6 billion to Africa, compared to $1.1 billion for 2008 and $200 million in 2007.

"For the remainder of 2009 it is likely that the stock of our lending in Africa will double relative to where it stood at the end of 2008," said Roger Nord, mission chief to Tanzania and a senior advisor in the IMF's Africa Department.

"This is clearly a reflection of what is happening in the world economy, but it is also a reflection of the IMF's conscious policy to scale up our assistance to Africa," he added.

The increase is not only new lending for countries that graduated from IMF assistance during the decade of high economic growth but also increases in existing loan programs, said Nord.

Last week, the IMF approved a combined $545 million in emergency funding for Kenya and Tanzania, an example of countries that have followed sound economic policies but have been unable to escape the effects of the crisis.

The IMF financing is designed to cushion falling currency reserves, while at the same time allowing countries to continue spending on vital infrastructure projects.