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Review Africa’s SDR Allocation Upward- Akerele, Development Partners Urge IMF

The Executive Director of Policy House and convener Borrow Right Africa program Taiwo Akerele has joined other development practitioners across the world to call on the IMF to review the miserly 5% allocation to Africa on the recently released USD$650bn Special Drawing Rights (SDR) post COVID recovery package for the global economy.

Akerele who spoke along other panelists at the just concluded program in New Jersey, Elizabeth insisted that Africa with about 1.5bn people and a growing economy requires more support and technical input compared to what it currently gets from development partners. Other speakers at the conference include Amir Dauda from Pakistan, a former IMF senior economist, Philipa Dennis from Global Funds and Vivian Marcus Lee from China Exim Bank.

You will recall that Nigeria got an allocation of $3.4bn accounting for 10% of the total $33bn allocated to Africa in the 2021 SDRs, but analysts, economists and civil society groups across the globe have described the SDRs as skewed in favoured of developed countries who may not be in need of the rescue package compared to the African continent. For instance while Asia got 21% and Southern America combined got a total of 8% implying that the IMF has more confidence on the ability of these continents to utilise their allocation effectively.

Akerele, who was the only African and Nigerian that spoke at the event called on African countries to be more responsible in economic management procedures, stop the leakages, invest more in human and infrastructural development while reducing the cost of governance. It was resolved at the summit which is a Pre- United Nations General Assembly (UNGA77) event that countries should borrow more responsibly, service their debt as debt cancellation is no longer fashionable in the 21st century.

The event was jointly organised by Borrow Right Africa program in conjunction with the African -Caribbean Policy Roundtable, a U.S based think tank. Special Drawing Rights (SDR) are periodically issued by the IMF to help stabilise struggling global economies and in recent times, the SDRs has generated alot of controversy around its unfair distribution across continents.

Nigeria is currently indebted to her borrowers to the the tune of USD$39bn according to the Debt Management Office (DMO) Nigeria. out of which Multilateral Institutions such as the IMF, World bank and AFDB accounts for close to 40% while others such as Bilateral and domestic borrowers account for the balance. Analysts insists that Nigeria is inching close to its debt/GDP ratio ceiling of debt overhang which is affecting budget performance.

Recently it was reported that Nigeria spend an approximate 90% of its revenue to service its debt commitment to its borrowers a situation that compounds limits spending on social services such as primary health care, basic education, food security and essential infrastructure.

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