The re-channeling of the International Monetary Fund’s (IMF) $25 billion special drawing rights (SDRs) from donor countries to multilateral development banks will create $100 billion in additional financing for Africa, said African Development Bank (AfDB) President Dr Akinwumi Adesina.
Speaking at a high-level roundtable at the 78th United Nations General Assembly last week, he said the SDR rechannelling would be at no cost to taxpayers in donor countries, with zero risks of loss.
He explained that SDR-rechannelling via multilateral development banks was the most suitable model available to leverage and deliver the trillions of dollars needed for development to be accelerated.
The issuance of $500 billion in new SDRs to tackle climate change - if re-channelled through multilateral development banks - will deliver $2 trillion in global development financing, complementing the IMF’s efforts, Adesina stated.
However, the international financial architecture was not delivering the scale of resources needed to allow Africa to achieve its growth and development priorities.
Adesina said that Africa faces a financing gap of $1.2 trillion through 2030 to finance its sustainable development goals.
“To achieve a fair, more just, and equitable world, we must change the structure, conduct and performance of the global financial architecture,” he added.
(Writing by P Deol; Editing by Anoop Menon)
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