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IMF to provide African members special drawing rights of $650bn

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IMF raises alarm about 'storm clouds' over world economy

The International Monetary Fund (IMF) is to offer African members special drawing rights for funds, as it stated that Africa will need double of $286 billion for the continent to get back to its post-COVID-19 performance after the pandemic disrupted its growth in 2020.

Sub-saharan Africa had been dragged into recession by the virus breakout, leading to a contraction of -1.9%, which is the worst performance of African economy in recent years.

The IMF said Africa will account for 3.2% out of its projected 6% global growth, and that the estimated growth for Africa is poor, as the continent is meant to outgrow the world at 7% to 10% if it is to meet its youthful populations’ aspiration.

This was stated in a document titled “A PROPOSAL TO END THE COVID-19 PANDEMIC” and seen by Ripples Nigeria, in which the IMF added that for Africa to become more prosperous and more secure, it needs to grow faster than the world – but this will cost no small amount.

Read also: IMF tells President Buhari to borrow more, or raise taxes

It was gathered that the price to adequately tackle COVID-19 is $285 billion within the next four years, with low-income countries in the continent needing about $135 billion of the fund.

But to take it a step further in terms of catching up with wealthy countries of the world, Africa will need twice as much of $285 billion. It was gathered that development financing, which includes Grant’s and concessional loans – from bilateral and multilateral bodies – will increase because exceptional measures are needed during exceptional times.

The Kristalina Georgieva-led body said without increasing the debt burden of African members, IMF will approve an unprecedented new allocation of Special Drawing Rights of $650 billion.

“Once approved, which we intend to achieve by the end of August, it will directly and immediately make about $33 billion available to our African members. It will boost their reserves and liquidity, without adding to their debt burden.” IMF stated.

By Fakoyejo Ayodeji…

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