AfDB, others receive $20 billion IMF Special Drawing Rights approval

President of the African Development Bank Group, Dr. Akinwumi Adesina, has revealed that the International Monetary Fund (IMF) Board has approved Special Drawing Rights (SDRs) amounting to some $20 billion, which will now be rechanneled to the African Development Bank and other multilateral financial institutions.

Although SDRs serve as a supplementary international reserve asset for countries worldwide, only 20 organizations have been designated as ‘prescribed holders’ of the reserve, excluding African development institutions and other private organizations or individuals from drawing directly on these funds.

However, speaking at a media cocktail organized on the sidelines of the 59th Annual Meetings of the African Development Bank in Nairobi, Kenya, Dr. Adesina disclosed to reporters that after several years of advocacy and requests to the IMF for reforming the global financial architecture, a new framework has been approved by the IMF Board.

This framework will now allow the African Development Bank Group and other financial institutions to receive more capital from the international reserves.

“I’m pleased that their board approved $20 billion as a limit for the rechanneling towards hybrid capital for use by multilateral development banks, for example and it’s just this simple, those SDRs can be leveraged by four times, and that $20 billion will become $80 billion and just tells you the resources you need faster for development”.

The top banker further explained that In collaboration with the Inter-American Development Bank and the IMF, the board approval given by the IMF will serve as a hybrid instrument that will allow the stretching of those SDRS to be able to lend more to developing countries.

Despite these interventions, Dr. Adesina believes that other forms of domestic Resource mobilization must be on the priority list for African governments as he argues that prevention of losses and the efficient use of public funds will yield positive impacts on the economy of Africa.

The 59th annual meeting of the African Development Bank is focusing on “Africa’s Transformation, the African Development Bank Group, and the Reform of the Global Financial Architecture” which AfDB believes will create a platform for dialogue on the issues confronting the many African economies while examining the structural reforms required in the International Financial Architecture.

Being the statutory meeting of the African Development Bank, stakeholders are also expected to examine the performance of the Bank in the previous year as it positions itself for a new outlook while making relevant decisions backed by resolutions.