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The Africa Confidential Blog

  • 5th August 2021

Africa's stake in the IMF cash boost

Blue Lines

After the directors of the International Monetary Fund voted on 2 August for a record-breaking injection of resources – the creation of US$650 billion reserve assets known as Special Drawing Rights – the central banks of all member states will be credited on 23 August with allocations in proportion to their shareholdings. 

African countries account for 6.4% of the SDR quota, which will net the continent's treasuries less than a fifth of the $250bn that the IMF believes they need to finance their recoveries over the next three years. The IMF is launching a Resilience and Stability Trust this year to help low to middle-income economies boost growth.

In June, the Group of Seven (G7) countries backed in principle a scheme to allocate $100bn of the new SDR issue to poorer countries. But a subsequent meeting of the G20 fudged the issue and no formula, conditions or eligible countries have been agreed.

France has committed to reallocate at least some of its new SDRs to Africa. South Africa's President Cyril Ramaphosa has called for 25% of the total issuance, over $160bn, to be allocated to the continent. 

Most immediately useful would be to use $50bn of the SDRs to finance the purchase and distribution of vaccines, according to the IMF's fully costed plan, which proposes proportional contributions from the G7 and G20 economies. Apart from bringing the virus and its variants under control much faster, it would save millions of lives and add trillions to the global recovery, argues the IMF.