prevail on the G20 and other richer countries to reallocate their share of the newly issued Special Drawing Rights to poorer countries who need them the most.
The IMF had last week announced a general allocation of SDRs equivalent to $650 billion of which African countries would only get about five per cent of the SDRs amounting to $33 billion. Nigeria is billed to get $3.5 billion from the new SDR issuance. Growth distribution of the new $650 billion SDRs allocation which will become effective from August 23, 2021 showed that the G20 countries will receive 68.12 per cent amounting to $442.8 billion; while the G7 countries will 43.50 per cent amounting to $282.8 billion; African countries are to get 5.12 per cent which is $33.3 billion. The Debt Service Suspension Initiative DSSI-eligible countries are getting 4.21 per cent or $27.3 billion.
“To undertake a general allocation now will help to provide the liquidity urgently needed by the world’s poorest countries. SDRs that are reallocated by the Fund’s wealthiest members can provide the capital needed to respond to the pandemic, fund vaccine rollout and stabilise and revitalise national economies,” Smith said.
The ONE Campaign noted that while this $33 billion would be a helpful boost to African countries, it is less than 10 per cent of the US$345 billion financing gap needed to reposition the continent from the effect of the Coronavirus pandemic by 2023.