Resource competition

Africa: AfDB and Afreximbank clash over scarce SDR funding

By Julian Pecquet

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Posted on May 3, 2022 09:42

A behind-the-scenes fight over scarce funds between two of Africa’s leading multilateral banks erupted into public view during the World Bank/IMF spring meeting in Washington.

On the face of it, financial officials from the continent presented a united front, advocating for Africa to get a larger share of the $650bn in reserve assets that the IMF allocated last year to help the global economy recover from the Covid-19 pandemic. Africa only got $33bn (5%) of these Special Drawing Rights (SDRs) and has been pressing rich countries to pump $100bn in SDRs into weaker economies.

Lean times, however, have exacerbated an intra-African clash over who should get a share. With the African Export-Import Bank (Afreximbank) going beyond its original trade-finance remit to emerge as a nimble lender on everything from Covid-19 vaccines to pandemic recovery, there are calls for the bank to be recognised as a prescribed holder of SDRs.

We believe that our own continental institutions, such as the AfDB and Afreximbank, should be recipients of the recycling of these SDRs.


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