A plea has been made by Nigeria’s Finance Minister, Zainab Ahmed, and three other African Finance Ministers to the G-20 to order the International Monetary Fund (IMF) to release loans to Africa to boost a post-pandemic development.
This was made public on Thursday after the Ministers released an op-ed in the Italian la Stampa newspaper, before the G-20 finance ministers meeting in Venice this weekend.
The other Finance Ministers include Ken Ofori-Atta of Ghana, Nicolas Kazadi of the Democratic Republic of Congo and Adama Coulibaly from the Ivory Coast.
This comes after G-7 leaders announced plans for a $100 billion reallocation as France announced new SDR plans for the continent.
According to the Ministers the IMF should revitalise its Poverty Reduction and Growth Trust, in a bid to support lending and development to low-income countries through interest-free loans.
“Timely, stable and sufficient long-term financing on fair terms for an inclusive and sustainable post-Covid recovery remains out of reach for many developing countries.
“The urgency now is to accelerate the disbursement of these SDRs to forestall the current emerging market liquidity crisis devolving into an insolvency crisis,” they said.
The IMF’s board last month, unanimously supported a proposal to create a record $650 billion of new reserves, known as special drawing rights, or SDRs, for its members, but only $33 billion of that amount has been earmarked for Africa.
The plan still requires final approval by the Washington-based lender’s board of governors, which is comprised of representatives from its 190 member countries – typically their finance ministers or central bank governors.
“The urgency now is to accelerate the disbursement of these SDRs to forestall the current emerging market liquidity crisis devolving into an insolvency crisis,” the African finance chiefs said, calling on the IMF to outline how the rights will be dispensed and set reallocation on-lending terms.
The African Finance Ministers urged the G-20 to lend $30 billion in SDRs to the continent, which they say would offer FX liquidity on sovereign bonds and boost investment in Sub-Saharan Africa and also deal with climate change threats in the continent.
Nigeria’s Finance Minister said Nigeria’s budget deficit for 2022 will rise to N5.62 trillion and would be funded by new foreign and domestic borrowings, after the Federal Executive Council (FEC) approved the 2022–2024 Medium Term Expenditure Framework and the Fiscal Strategy Paper (MTEF/FSP).
