By Kemi Osukoya | ECONOMY & POLICY
The International Monetary Fund said it is working closely with the World Bank and the International Energy Agency to assess the widening impact of the global energy shock, warning that higher oil prices and prolonged geopolitical tensions are pushing the world economy towards a more adverse growth outlook and deepening concerns over food security and financing pressure across Africa and other developing economies.
Speaking during a press briefing on Thursday, IMF spokesperson Julie Kozack said the institution is now intensifying consultations with member states seeking policy guidance and potential financial assistance as governments confront rising import costs, inflation pressures, and slowing global growth.
“We do have active discussions with our member countries to assess what are their needs given this latest shock to the global economy, and we’re exploring, of course, with them, where the Fund may be able to help,” Kozack told reporters.
She noted that many countries are first seeking policy advice tailored to domestic conditions before pursuing financial assistance.
“Many countries are actually asking [the Fund] for support in the policy areas,” Kozack said. “They are asking us for policy advice—how can they best respond to the shock given their individual country circumstances?”
The comments come as the IMF warned that the global economy is drifting away from its April baseline forecast toward a weaker, more volatile environment shaped by higher oil prices, inflation risks, and geopolitical uncertainty.
“We are clearly moving out of the reference scenario toward the adverse scenario,” she said.
She added that while oil prices have risen sharply, medium-term inflation expectations in major economies remain “relatively well anchored,” and “financial conditions remain quite accommodative.”
For many African economies, however, the energy shock is increasingly spilling into agriculture and food systems through higher fertilizer costs, raising fears of broader social and fiscal strains across import-dependent countries already dealing with debt vulnerabilities and tightening financing conditions.
“The energy shock that has hit the global economy, because of the implications for fertilizers in particular, also has the effect of becoming a food price shock and, for some countries, a food security issue,” she told the Africa Bazaar in response to a question.
She underscored that sustained increases in fertilizer prices could begin translating into weaker crop yields and higher food prices within months, a particular risk for import-dependent economies across Africa already facing debt pressures and tighter external financing conditions.
The IMF managing director Kristalina Georgieva recently traveled to Ethiopia where she held bilateral meetings with Prime Minister Abiy Ahmed and in Kenya, where she met government officials and held talks with heads of state from Egypt, Côte d’Ivoire, Ghana, and others as well as private-sector executives and civil society leaders during the Africa Forward Summit in Nairobi.
According to the spokesperson, discussions focused on Africa’s economic prospects, reform efforts, and the continent’s long-term role in the global economy.
“Africa is a continent of young people where she sees the future as particularly bright,” the IMF spokesperson said, referring to the managing director’s remarks during the visit.
The Fund also pointed to reforms undertaken by several African governments aimed at improving fiscal discipline, opening markets, and expanding private-sector participation.
“Many African countries have undertaken a number of very important reforms to open their economies, create space for the private sector to thrive, reduce debt and pursue more prudent fiscal policies,” the spokesperson said.
Still, the Fund acknowledged that African economies remain exposed to external shocks linked to volatile commodity markets, rising borrowing costs and slowing global trade.
Kozack said the Fund will continue to monitor government responses to the crisis, noting that advanced economies have largely relied on tax cuts and fiscal support measures, while some developing countries have adopted conservation policies and targeted interventions to manage fuel demand.
Kozack also welcomed signs of easing trade tensions between the United States and China, saying improved dialogue between the world’s two largest economies would help reduce uncertainty in the global economy and support global growth.
“Anything that is going to help reduce trade tensions and reduce uncertainty is good for both of those large economies, and, of course, good for the global economy as well,” the spokesperson said.
