…Preserve exchange rate flexibility, protect Central Bank independence
Kristalina Georgieva, managing director of the International Monetary Fund (IMF), has called on countries around the world to lower both tariff and non-tariff trade barriers, stressing the urgent need for global economies to prioritise economic and financial stability by addressing vulnerabilities within their own systems.
Speaking during a press briefing on the IMF’s 2025 Global Policy Agenda at the ongoing IMF/World Bank Spring Meetings in Washington, D.C., Georgieva said, “The best way for countries to safeguard their economic and financial stability is to get their own house in order.”
However, she acknowledged the growing divide facing low-income and conflict-affected countries, particularly in Africa. “The direct impact of tariffs on most of Africa is relatively small, but the indirect impact is significant. Slowing global growth means downgraded prospects for the continent,” she noted.
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For oil producers like Nigeria, Georgieva pointed to the additional fiscal pressure resulting from falling oil prices. “On the other hand, for oil importers, this is a breath of fresh air,” she said, illustrating the diverse impacts of global trends on different economies.
Offering region-specific recommendations, she said, “If I were to give basic advice for countries like Nigeria, Egypt, Ghana, and Côte d’Ivoire, it would be: continue on the path of strengthening your fundamentals.” She stressed the importance of fiscal resilience, saying, “You must have the strength to build buffers for times of shock. And don’t use excuses like, ‘It’s difficult, we can’t go for more tax.’ Yes, you can.”
She encouraged governments to broaden the tax base, combat tax evasion and avoidance, and adopt technology to improve revenue collection. “Using technology, as some countries are doing, to chase the tax dollar is a very good thing to do,” she said.
On monetary policy, Georgieva reiterated the need for tailored approaches. “We’re no longer in a place where you can look at what the Central Bank governor in a neighboring country is doing and copy it. You must assess your domestic inflationary pressures and do what’s right for your country.”
On fiscal policy, Georgieva stressed the importance of rebuilding buffers and ensuring debt sustainability, noting that while some economies may need temporary and targeted fiscal support in response to shocks, most must define credible and gradual adjustment paths. “We urge countries to protect key investments, maximise spending efficiency, and create space for longer-term needs,” she said, adding that the trade-offs will be particularly difficult for low-income countries already grappling with tight financial conditions, slowing global growth, and declining aid flows.
“To help ease these trade-offs, domestic resource mobilization must be part of the mix. We cannot have countries with tax-to-GDP ratios below 15 percent, it makes it difficult to sustain the functioning of the state,” she cautioned.
On monetary policy, Georgieva underlined the shift from synchronized global actions to country-specific responses. “The time when countries marched in lockstep is over,” she said, noting that inflation pressures vary significantly between countries. “Our advice is simple: watch the data, watch inflation expectations. Central Banks must strike a delicate balance between supporting growth and containing inflation.”
She stressed the importance of credibility in monetary policy, saying, “Central Banks must not only adjust policy interest rates, but also rely on credibility to anchor expectations. Central Bank independence is critical for credibility. Protect it.”
Addressing open economies, particularly emerging markets, she urged the preservation of exchange rate flexibility to serve as a shock absorber. “In the event of unwarranted currency market volatility, these countries can find policy guidance in the IMF’s Integrated Policy Framework,” Georgieva said.
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She outlined three overarching priorities, with the third focused on growth-oriented reforms aimed at raising productivity. “Even before the latest shock, we were living in a low-growth, high-debt world. We’ve been sounding the alarm on weak medium-term growth for quite some time,” she said. “Now is the time for long-needed but often delayed reforms that create a good business environment, promote entrepreneurship, reform labor markets, and foster innovation, particularly in a world of rapid technological advancement.”
She reaffirmed the IMF’s commitment to supporting member countries, stating, “We are focusing on what we do best, helping them secure economic and financial stability, resolve or even prevent balance of payment problems, and implement strong policies and institutions to underpin vibrant economies.” This support, she said, would come through surveillance, diagnostics, policy advice, and, where necessary, financial assistance.
Georgieva also called for strengthening the global financial safety net, highlighting the importance of collaboration with regional financing arrangements and major Central Banks that provide currency swap lines.
