By Dr. Akinwumi A. Adesina, President, African Development Bank Group
At the height of the COVID-19 pandemic in 2021, the IMF took the bold step of shoring up the global economy by allocating a historic $650 billion in SDRs. This decisive action demonstrated the global community's capacity to respond adequately to unprecedented crises. However, of the newly issued SDRs, Africa received only about 5 percent of the total allocation, the smallest portion among the different regions of the world. The allocation to all of Africa, a continent of 1.
While these measures are commendable, the African Development Bank believes there is a need for a more targeted and complementary third option: rechannelling SDRs through multilateral development banks . Why multilateral development banks? The answer lies in their unique value proposition: MDBs can multiply the rechannelled SDRs by at least three to four times their original values.
It also threatens the achievement of the United Nations' Sustainable Development Goals by 2030, a target that is already precarious given current realities. Add to this the existing development challenges posed by gaping infrastructure deficits, widespread food insecurity, gender disparities and rising youth unemployment, and it soon becomes apparent that rechannelled SDRs are vital injections of much-needed funding.
The reallocation of SDRs is a clear demonstration of solidarity and collective action. It signifies a commitment from the international community to support inclusive growth and progress in regions that have long struggled with poverty and economic disparities. By mobilising substantial financial resources, this initiative can bridge critical funding gaps and pave the way for transformative projects that will substantially improve the quality of life for millions of people.
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