Background

The IMF’s second African Regional Technical Assistance Centre in West Africa (AFRITAC West 2), is a collaborative effort financed by the International Monetary Fund (IMF), recipient countries and several bilateral and multilateral partners. It originated from the IMF’s response to African leaders’ call on the international community to increase capacity development (CD) to Africa and focus it more sharply on capacity building in core macroeconomic and financial management areas. 

The main focus of AFRITAC West 2 is to provide CD support to six Anglo-and Lusophone West African countries (Cabo Verde, Ghana-host country, Liberia, Nigeria, Sierra Leone and The Gambia). This regional center, located in Accra, is governed by a Steering Committee (SC) composed of representatives of AFRITAC West 2 member countries, development partners, and the IMF. The activities undertaken by the center follow an annual workplan, which is reviewed and approved by the SC and retains some flexibility to reflect emerging needs and priorities.  

Staffing at AFRITAC West 2 is tailored to the needs and priorities of participating countries. The Center currently has seven resident advisors that implement CD in the following areas: Revenue Administration (Tax and Customs), Public Financial Management, Macroeconomic Statistics, Monetary Operations and Payments Systems and Banking Supervision. 

AFRITAC West 2 is completing its second financing phase and will start its third 5-year program (Phase III) in August 2024. During Phase II, the center has administered over 600 CD missions, trainings and attachments to member countries. These were in line with objectives, outcomes and milestones entrenched in a results-based management (RBM) framework, and in cooperation with other RTACS and development partners in the region. Five years of support to country authorities and institutions, albeit marked by the COVID-19 pandemic, have led to key achievements in enforcing strong and efficient systems in the core macroeconomic and financial management areas. 

• CD in tax administration, in response to the heightened need for domestic revenue, has supported the establishment of an Internal Affairs Unit in The Gambia, development of ICT strategies in Nigeria and The Gambia, and improvement of yields from audits of the telecommunication sector in The Gambia, and Sierra Leone, and the financial sector in Ghana, Nigeria, Liberia, and Sierra Leone. In further support of authorities’ revenue mobilization objectives, CD focused on improving customs administration core functions by enhancing customs procedures in border and inland controls (BIC), compliance risk management (CRM) and post-clearance audit (PCA). 
• Work in PFM strengthened program-based budgeting in Cabo Verde and Ghana, enhanced the credibility of the medium-term macro-fiscal framework in The Gambia, supported Sierra Leone to implement the SOE Ownership Policy and adopt the IMF’s SOE Health Tool, and improved the coverage, transparency, and quality of fiscal reporting in Cabo Verde and Ghana. 
• Central banks in The Gambia, Ghana, and Sierra Leone made steady progress in improving capacity for monetary policy analysis and near-term forecasting of inflation and economic activity. With AFW2 assistance, the Bank of Ghana (BoG) published its forecasting and policy analysis system (FPAS) in an IMF Working Paper (22/169) jointly with ICD, while the Bank of Sierra Leone (BSL) and the Central bank of the Gambia (CBG) moved from weekly to daily calculation and publication of their FX reference rate. Additionally, three central banks have made solid progress in operationalizing the oversight and risk management function for financial market infrastructures (FMI) in their countries, and the BoG has published its first self-assessment of Real Time Gross Settlement against CPMI-IOSCO Principles for FMIs. 
• AFW2 successfully advanced the effectiveness of financial sector supervision and regulation in its member countries. CBG and the Central bank of Liberia developed and operationalized risk-based supervision frameworks, with AFW2 guidance. AFW2 also assisted the BoG to develop a training curriculum to improve supervisory staff competencies, as well as the BSL to develop a toolkit for the evaluation and modeling of expected credit loss. 
• AFW2 supported member countries to strengthen the compilation and dissemination of national accounts and price statistics and the development of new macroeconomic indicators. Progress was achieved in the implementation of the System of National Accounts 2008 (2008 SNA) across AFW2 member countries. The Gambia Bureau of Statistics developed and published quarterly GDP statistics for the first time in The Gambia. All countries were supported to improve or update the Consumer Price Index, while The Gambia, Ghana, Liberia and Sierra Leone were also supported to or update their Produce Price Index. 

Going into Phase III, the center will continue to support members in core areas, tailored to specific country needs. The focus will be on country ownership of CD interventions and the implementation of recommendations within a results-oriented approach, and the achievement of set outcomes towards the larger objective of macroeconomic growth and stability. Innovations in CD will include the addition of new workstreams in Tax Policy, Debt Management, and Governance/Anti-Corruption, leveraging regional expertise and knowledge exchange, expanding the scope to include emerging areas in climate change, gender inclusivity, and cybersecurity, and augmenting CD modalities with technology to improve the quality and impact of AFW2 support. The center will also aim to strengthen regional and development partner coordination, as outlined in the Phase III Program Document, endorsed by the Steering Committee.