As the city of Marrakech prepares to host the 2023 Annual Meetings of the World Bank and the International Monetary Fund (IMF) next week, the climate finance issue is set to dominate the discussions of world leaders.
The IMF underscored the importance of the private sector’s contribution to the majority of the needed $2 trillion in annual climate investments in developing countries by 2030, warning about the risk of governments incurring high levels of debt if they attempt to achieve their net-zero goals solely through public funding, according to Reuters.
In order to achieve net-zero emissions by 2030, $5 trillion in annual investments is required globally. $2 trillion of this sum has to be invested in emerging markets and developing economies.
The same source added that the IMF’s Global Financial Stability Report (GFSR) estimates that private sector contribution will need to cover roughly 80% of these investments.
“We project that growth in public investment, however, will be limited and that the private sector will therefore need to make a major contribution toward the large climate investment needs for emerging market and developing economies,” said authors of the GFSR according to Reuters.
However, the contribution increases to 90% when China is excluded, showcasing the substantial role of Beijing’s state resources.
That’s why, relying on public spending solely to finance vast decarbonization investments is likely to lead to an unsustainable rise in debt levels, with possibly 45% to 50% of gross domestic product for a large, high-emitting emerging market, the Fund’s Fiscal Monitor says.
Last September, the World Bank, and the International Monetary Fund confirmed that the 2023 Annual Meetings of both international institutions will proceed as planned from October 9 to October 15, 2023, in the city of Marrakech.
This confirmation to proceed with the annual meetings in Morocco follows the devastating earthquake that rattled the region of Al-Haouz, 70 kilometers from Marrakech.
The decision of both institutions mirrors their confidence in Morocco’s crisis response and Marrakech’s readiness to host the 2023 Annual Meetings, according to a joint statement.
Aziz Akhannouch, the Head of the Moroccan Government, previously informed the Managing Director of the IMF, Kristalina Georgieva, that the relocation of the annual meetings from Marrakech would have profound repercussions on Morocco’s hospitality sector.
In this regard, the city of Marrakech prepares to host 10,000 to 15,000 participants to the Moroccan tourist hub. It is set to host a gathering of Finance Ministers, and Central Bank Governors representing 189 member countries, in addition to leaders, experts, and media for discussions about global economic challenges.
The event recognizes Morocco’s progress over the past 24 years and marks its return to the continent 50 years after hosting in Kenya in 1973.
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