Africa’s Oil Shock: Are the Bretton Woods Institutions Ready?

The decision to end the use of fossil fuels for energy production by 2050 will result in a permanent collapse in demand for oil. This paper examines the likely effects of this "Africa oil shock" on three large African countries, and whether the International Monetary Fund and the World Bank Group would be able to deliver on their Bretton Woods mandate—avoiding the resulting balance of payments and fiscal crisis. The paper also considers whether the expansion of their mandates to include reducing the risk of climate change and limiting the impact of climate shocks also encompasses actions to minimize or avoid this financing crisis. There are seven recommendations.