The International Monetary Fund’s (IMF) Kristalina Georgieva has voted that for inclusive and sustainable growth in Africa, it will accelerate its Special Drawing Rights (SDR) allocation with more funding to the African continent.
She said this at the EU-AU Summit Roundtable on financing for sustainable and inclusive growth recently. She noted that $33 billion for African countries out of a $650 billion global allocation tilts the scale further from an inclusive growth for Africa.
She said: ” As the world emerges from an unprecedented crisis, all countries are struggling with challenges–but it is particularly true for Africa. Africa experienced a painful contraction in 2020. Since then, it has started growing again but for many countries, growth falls short of what is needed.
“In both 2021 and 2022, Africa’s projected growth trailed the global average. And it ought to be the other way around. Africa should outperform the rest of the world—so countries can create jobs and lift up living standards.
“It is in this context that we at the IMF have taken unprecedented action to support our member countries, especially on the African continent. I like to say: we are stepping up with and for Africa.
“We have reformed our concessional lending framework. And here I want to recognize Prime Minister Magdalena Andersson of Sweden. Her leadership as chair of the International Monetary and Finance Committee (IMFC) helped us to increase access to IMF financing for African economies. And, as a result, last year we provided a lending that was 13 times higher than the annual average of the previous decade.”
She added: “We also moved quickly for a Special Drawing Rights (SDR) allocation. As has been acknowledged, it has helped Africa—but it has not helped enough. In some countries, it amounted to as much as 6 percent of their GDP, which is not at all trivial. But that said, $33 billion for African countries out of a $650 billion global allocation is clearly not where we want to be.
“So, we are moving to the next frontier which is large-scale on-lending of SDRs—from countries that got them but don’t need them as much, to countries that need them most.”
She added that they have about $60 billion in pledges from G20 members and they urge more developed countries to pledge more.
She added: “For the first time in our history, the IMF will offer longer-term maturities and longer-term grace periods to support the structural transformation efforts of emerging market and developing economies.”
“Our objective is to have the RST design approved at our Spring Meetings in April. I ask all member countries to help us meet this deadline and thus to be in the implementation phase by the fall.”
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