Harare – The SADC Parliamentary Forum (SADC PF) and the African Forum and Network on Debt and Development (Afrodad) have called on the International Monetary Fund to issue Special Drawing Rights and extend debt relief, in part to assist Africa’s efforts to recover from the Covid-19 pandemic.
This came out of a webinar on “IMF Special Drawing Rights: A Sustainable Option for Financing the Fight Against COVID-19 Pandemic and Economic Recovery in Africa”, jointly organised by SADC PF and Afrodad on March 15.
Special Drawing Rights (SDRs) are an international reserve asset created by the IMF to supplement member countries’ official reserves.
They are issued to central banks and can be exchanged for hard currency with other IMF members, or can be used to bolster a country’s creditworthiness.
SDRs are costless assets which countries use as they see best and with almost no conditionality.
As such, SDRs offer countries revenue streams without contracting debt.
SADC PF Secretary-General Ms Boemo Sekgoma told the webinar that African finance ministers had been unequivocal in calling for issuance of new SDRs.
“During the meeting convened by the Economic Commission for Africa and the International Monetary Fund on 5th February, 2021, African ministers of finance were unanimous in their call for additional liquidity, US$500 billion in Special Drawing Rights and more concessional resources and an extension in the Debt Service Suspension Initiative, among others, given the prolonged nature of the Covid-19 pandemic,” she said.
Mr Tirivangani Mutazu, a senior policy analyst at Afrodad, said in the event of new SDR issuance, parliaments would have to up their game in terms of guaranteeing transparency and accountability in how governments used the funds.
“SDRs comes with no IMF conditionality attached. It is money that goes directly to country treasury and national budgets. National budgets are approved by parliamentarians the legislature. Therefore, there will be need for transparency at national level by the executive and extensive oversight by parliament,” he said.
SDRs were last issued after the global economic meltdown of 2008-2009.