Akinwumi Adesina: IMF’s SDR allocation will boost finances of developing countries

Akinwumi Adesina, president of the African Development Bank (AfDB), says the International Monetary Fund (IMF) $650 billion special drawing rights (SDRs) will boost the reserves of developing countries.

Adesina said this on Thursday during a closed-door session between Angela Merkel, German chancellor, and heads of international development institutions to discuss the uneven global economic recovery, access to vaccines, and strategies to drive recovery from the COVID-19 crisis.

He said the SDRs, including $27 billion for African countries, were invaluable in facing down economic headwinds.

Nigeria will receive about $3.4 billion as its share, according to the IMF quota.

SDR is an international reserve asset created by the United Nations specialised agency to supplement its member countries’ official reserves.

The AfDB, in a statement, quoted Adesina as saying, “The recent IMF release of $650 billion in SDRs, with $27 billion to Africa, will go a long way in helping to boost reserves for developing countries.

“If the developed countries reallocate $100 billion of SDRs to Africa, as agreed at the Paris leaders meeting and by the G7, that will further support faster economic recovery in Africa.”

Speaking at the session, David Malpass, World Bank’s president, said progress had been made under the African Vaccine Acquisition Trust (AVAT) initiative of the Africa Centres for Disease Control and Prevention, but that advanced economies still need to make doses available to the rest of the world.

Highlighting the IMF’s projection of 6% global growth in 2021, Kristalina Georgieva, IMF’s managing director said: “The composition of the 6% is changing, with advanced economies broadly accelerating growth, whereas most emerging markets and developing economies are falling further behind. This is a dangerous divergence.”

According to her, vaccines remain the number one priority.

On her part, Merkel said that the G7, the International Monetary Fund (IMF), and World Bank have continued to take measures to support the COVID-19 recovery of lower and middle-income countries.

“We have noted that the recovery after the pandemic is a two-speed recovery, which is cause for concern,” she explained.

Heads of international development institutions present at the discussion include the heads of the AfDB, World Trade Organization (WTO), the IMF, the World Bank, the Organisation for Economic Cooperation and Development (OECD), and the International Labour Organization (ILO).

TheCable had reported that Ngozi Okonjo-Iweala, WTO DG, asked developed countries to channel IMF’s SDR allocation to African nations.