As the International Monetary Fund (IMF) puts finishing touches to its new financial drive to raise $650bn Special Drawing Rights (SDR) for member countries, African countries have called for a fair share of the largesse.
In a letter jointly signed by four African ministers, they said the IMF should invest $30bn on the continent in order to reduce the effects of the COVID-19 pandemic and climate change.
The open letter released on Friday by the Finance Ministers of Ghana, Nigeria, Democratic Republic of Congo and Ivory Coast also sought the support of richer nations in Africa’s drive to get more vaccines.
The IMF’s latest $650bn drive is the highest in history, of all its SDRs.
“Make the IMF’s promised new issue of Special Drawing Rights available as soon as possible and define a clear path forward for their maximal re-allocation and on-lending,” the ministers jointly wrote in the letter published on Friday morning.
The letter further read that “The urgency now is to accelerate the disbursement of these SDRs to forestall the current emerging market liquidity crisis devolving into an insolvency crisis.”
Already, Ethiopia, Chad and Zambia have debt burdens that greatly surpass their GDP and are calling for their lenders to write off their debts. The Ministers argue that, with the $30bn investment, some of these countries may bounce back gradually.
The SDR was set up to provide relief for countries as a result of the pandemic and it will be shared according to the shareholding and stake each nation holds at the IMF. The poorer countries of the world are only liable to a paltry percentage of 7% and it will be shared by 44 of them, many of which are in Africa.
IMF chiefs of finance will meet on Friday to discuss how to ensure a good chunk of the money goes to nations in needs but are unsure of what to meet from the high-shareholding nations.
The letter signed by Zainab Shamsudeen Usman, Nigeria’s Minister of Finance and her counterparts – Ghana’s Ken Ofori-Atta, D.R. Congo’s Nicolas Kazadi and Ivorian, Adama Coulibaly also urged the IMF to give Africa $30bn to help the Liquidity and Sustainability Facility (LSF) and the new African Stability Mechanism.
The Ministers said the funds “would) catalyse investments to Africa, reduce the liquidity premia on sovereign bonds offered by middle-income countries and incentivize green and sustainability-linked investments,”
The also called on richer nations to boost their support for Africa’s procurement of vaccines.
“In June alone there was a 290 million shortfall in vaccine supply,”
“We really need 1 billion doses donated in the next few months.”
Many African countries have had reduced vaccination drive as a result of the absence of vaccines.
The Indian government, which had been magnanimous with Astra-Zeneca vaccines from its Serum Institute had to withhold the distribution of vaccines to other countries of the world at the height of heavy infection rate and fatality.
