Africa receives $23bn SDRs IMF DMD

By Emma Ujah, Abuja Bureau Chief

The International Monetary Fund (IMF) allocated the sum of $23 in Special Drawing Right (SDRs) to Sub-Saharan African countries, in August.

The Deputy Managing Director of the Fund, Ms. Antoinette Sayeh, disclosed this in her opening remarks during the IMF Seminar: “Supporting Food Security in Sub-Saharan Africa amid the COVID-19 Pandemic and Climate Change,” on Tuesday.

The IMF had in August approved a $650 billion SDRs for member countries to assist them better tackle the COVID-19 pandemic and its social/economic impacts.

READ ALSO: COVID-19 pushes global debt to $256 trn – IMF

She said that African countries, South of the Sahara faced significant challenges of food security which has been exacerbated by climate change and the pandemic.

According to the DMD, policy makers across the continent and international organizations must act fast, to assist the ordinary populace who have been hit by the twin effects of climate change and the pandemic.

Her words, “The international community also needs to play its part. At the IMF, we have scaled up financing to support the region. In fact, in response to COVID-19, we provided in one year 13 times our average annual lending to sub-Saharan Africa.

”This allowed member countries the breathing space they needed to contain the pandemic, mitigate its economic impact, and meet urgent medical and food needs .

“In August, the IMF also made the largest SDR allocation  in its history, which included about US$23 billion for sub-Saharan Africa.

“This allocation is supplementing countries’ foreign reserves, reducing their reliance on more expensive domestic or external debt, and helping step up their fight against the crisis.

“To magnify its impact even further, the IMF is encouraging voluntary channeling of some of the SDRs from countries with strong external positions to those most in need.

“But clearly more needs to be done to enable greater food security in the region. And we have a panel of experts who we would love to hear from.”

Ms. Sayeh added that supporting Sub-Saharan Africa in safeguarding food security, was an endeavor that has become even more challenging in the face of the COVID-19 pandemic and climate change.

She said, “Indeed, we have seen a marked increase in the frequency and intensity of natural disasters, which are driving the desertification of the Sahel, for example, and threatening growth, employment opportunities and food security. Climate change can also act as a multiplier for conflict and fragility in the region.

“The COVID-19 pandemic has also disrupted production, imports and supply chains of food, resulting in volatile and rising food prices. And that, along with falling incomes from the pandemic, has led to an increase in the number of undernourished in the region by 20 percent in one year to reach 264 million in 2020.”

The DMD noted that it was deeply worrisome that the global recovery was driven by only a few countries that have had greater access to vaccines and resources, leaving others, especially low-income countries, at greater risk of falling behind.

She therefore called for urgent global action to close the gap in access to vaccines.

According to her, “Close to 40 percent of the population in advanced economies is fully vaccinated against COVID-19. In sub-Saharan Africa, that number is about 2.5 percent.

“Until we address this growing divide, COVID‑19 will continue to claim more lives.

“Another priority for Sub-Saharan Africa’s policymakers is to advance economic and structural reforms, including in the agriculture sector – the main driver of growth and jobs in the region. “But it is important to do so in a way that enhances resilience to climate change.”

Nigeria

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Source: Vanguard News

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