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

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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