President Akufo-Addo has called for the channeling of Africa’s quota of SDR $100billion agreed by G20 leaders at the Paris Summit through the African Development Bank and Afrexim Bank.
He said the decision to channel such support through only the International Monetary Fund (IMF) was not good enough.
“The IMF should not be the sole beneficiary of such rechanneling. We believe that our own continental institutions, such as the African Development Bank (AFDB) and Afreximbank, should be recipients of the recycling of these SDRs,” he said.
The President made the call on Sunday when he presented a report to the 35th Ordinary Session of the Assembly of the African Union in Addis Ababa, Ethiopia, in his capacity as AU Champion for Financial Institutions.
The two-day meeting of the Heads of State is on the theme, “Building resilience in nutrition on the African continent: Accelerate the human capital, social and economic development”.
Last May, in Paris, world leaders made a commitment to allocate the historic SDR 650 billion issuance to IMF Member States, with Africa’s quota allocation of 5% or SDR 33.3 billion.
President Akufo-Addo told the Assembly that in as much as, “We value this commitment to additional resources, of which our continent is in dire need. It is unfortunate, however, that the only proposal that has been put on the table by the European countries so far is to re-channel these SDRs through only one institution, the IMF.”
He pointed out that African Finance Ministers, with United Nations Economic Commission for Africa (UNECA), have consistently championed the allocation of SDRs to capitalize AFDB and AfreximBank, to help establish an African Stability Mechanism, and to initiate a Liquidity Support Facility (LSF).
“We need to guard against the continuing consequential stranglehold of the rating agencies, which has affected the cost and access to capital markets for African countries, and has, during this COVID period, resulted in the downgrading of many African countries, exacerbating even more their funding challenges,” President Akufo-Addo said.
He, thus, urged the AU Assembly to urge G20 leaders to stick to their commitment to reallocate to Africa the SDR $100 billion agreed to at the Paris Summit in May 2021.
The President urged AU Member States to commit to work collectively to reform the global financial architecture, as well as build and strengthen the Union’s financial institutions.