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African leaders descended on New York this week, calling on UN member states to mobilise billions of dollars through the IMF issuance of additional Special Drawing Rights (SDRs) – Fund reserve assets made up of a basket of currencies.
Countries across the continent hit by a combination of Covid-19 and low commodity prices are facing an unprecedented liquidity crisis as governments scramble to shore up crumbling economies.
The president of DR Congo, Félix Tshisekedi, said that an uneven recovery risks deepening the gap between Africa and the rest of the world.
Speaking in his capacity as chair of the African Union (AU) he said:
“The African Union supports all initiatives to finance the African economies affected by Covid 19, particularly… a fresh allocation of 650bn special drawing rights by the international monetary fund to meet the financing needs of countries facing difficulties due to the pandemic.”
Addressing the assembly in person, he called for UN member states to carry out the objective reached at the Paris Summit in May, of persuading rich countries to reallocate 100bn in IMF SDRs to African states.
“The 33bn special drawing rights allocated to Africa are insufficient given the immensity of Africa’s needs for its economic recovery,” he said.
“This is why the UN and its member states must support the objective of the Paris Summit of reaching 100bn SDR for Africa.”
Part of this allocation could contribute to increasing the capital of the African Development Bank (AfDB) and World Bank, he added.
Rwanda’s president Paul Kagame joined the call for additional SDRs to give African economies, paralysed by a solvency crisis, room for maneuver.
“A further reallocation of new SDRs to countries that need them most will help create the fiscal space for a faster and more equitable recovery from the pandemic,” he said addressing the assembly virtually.
Also speaking live from the UN complex in Manhattan, Zambia’s newly democratically-elected President Hakainde Hichilema said vaccines would also play a crucial role in rebuilding after the pandemic.
“Recovery from the pandemic hinges on mass vaccinations, before considering reforms and other facilities that tend to fail when countries lockdown their economies.
During his US trip, Hichilema is due to meet IMF and World Bank officials in Washington, his spokesman revealed on Thursday. The debt-laden southern African economy requires an IMF deal and restructuring of its debt with China to stay afloat.
He will also become the first African president to visit the White House under the administration of Joe Biden.
In an event hosted by the US on the sidelines of the summit, countries agreed that Covid vaccine shipments to Africa must rise more than sevenfold from 20m per month to 150m a month. This would help countries reach an agreed target of fully vaccinating 70% of its people by September 2022.
At the summit, the United States pledged to share 500m more Covid-19 vaccines to low-income countries over the next year, bringing its total pledges to more than 1.1bn doses.
