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How might the IMF’s Special Drawing Rights help Africa?

By Solène Benhaddou
Posted on Tuesday, 24 August 2021 10:47

A Dalasi note, the Gambian currency. Glowimages/Getty

How do the IMF's much discussed Special Drawing Rights (SDRs) work? How will they help African countries? What is their real value? Here are 5 key details to know about SDRs.

“The largest allocation of Special Drawing Rights (SDRs) in history—about US$650 billion—comes into effect today. The allocation is a significant shot in the arm for the world and, if used wisely, a unique opportunity to combat this unprecedented crisis,” said Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF) on 23 August.

With sub-Saharan Africa experiencing its first recession in 25 years in 2020, this economic tool, which was the focus of French President Emmanuel Macron’s summit on African economies on 17 May, could be used to help these seriously impaired economies.

Here are five things to know about SDRs:

1. Role of the SDR