President Muhammadu Buhari has asked the International Finance
institutions to approve 25-30% of unused Special Drawing Rights, SDR, for African countries.
President Buhari tabled the request while contributing to debates at the ongoing African Finance Summit
holding in Paris, France. The President said the 5.12%, or SDRs 3 3 b n o u t o f SDR 5 0 0 b n approximately, $650b that will go to Af r i c an count r i e s i s “ inadequate” to cope with the growing financial stress facing the continent. He sees expansion of
Africa’s share of the SDR through market based instruments such as
“liquidity and sustainability
facilities and poverty reduction
growth trust” , as panacea to aiding the low income nations respond to their growing needs. Buhari said
Nigeria welcomed the decision to use part of the unused SDR to recapitalize International Financial
Institutions, which he said will also enhance their ability to provide concessional credit facilities to vulnerable countries. The President also assured the international community of Africa’s readiness to
carry out comprehensive reforms n e e d e d t o
s t r e n g t h e n d e b t
management, promote transparency and accountability. The summit is also being used to strengthen
bilateral cooperation between Nigeria and France which already
has investment portfolio worth over €776m and USD592.3m, spread
across about 15 projects in Nigeria.
It was learnt that there is also an ongoing negotiation to secure a
€70m concessional credit facility to finance health projects in Oyo State, Nigeria. President Buhari, while making case for expansion of credit facilities to the private sector, noted
that “In situations where public sector balance sheets are overburdened,
there should be additional lending to the local private sector
and public private partnerships”.
Ma n a g i n g Di r e c t o r o f t h e International Monetary Fund (IMF),
Kristalina Georgieva, in her contribution, said Africa must be assisted by her friends to “return to the remarkable development progress witnessed before the global coronavirus pandemic” as well as
“take full advantage of the tectonic shifts in the global economy toward
digital-driven, low-carbon and climate resilient growth”
“There is urgency to focus on financing Africa.” Georgieva noted
that the pandemic-caused recession
shrank the GDP of the continent by 1.9
percent – the worst performance on
record. “This year, we project global growth at 6 percent, but only half that
– 3.2 percent, for Africa. “This is a dangerous divergence. It ought to be
the reverse: Africa needs to grow faster than the world – at 7 to 10
percent – to meet the aspirations of its youthful populations, and become
more prosperous and more secure.
“Yes, together we have avoided a much worse economic crisis. Now, we
must build on this initial momentum to bring the pandemic to a durable end and boost growth in Africa. She said
that Africa will need additional financing of $285b to adequately
respond to the COVID through 2025.
“ Of this, $135 billion is for low income countries. This is the bare
minimum. To do more – to get African nations back on their previous path of catching up with wealthy countries –
will cost roughly twice as much.”
The IMF boss expressed optimism that the seeming daunting task can be accomplished.