*Emphasis on country need, not GDP in funds allocation
From Femi Mustapha, in Kaduna
The Africa Network for Environment and Economic Justice (ANEEJ) has called on the International Monetary Fund (IMF,) and developed countries to consider the allocation of funds based on the country’s needs and not on GDP as it would help developing countries cope with the debt crises they currently face.
This was contained in a statement signed by the Acting Executive Director, ANEEJ, Mr Leo Atakpu, and made available to the media in Kaduna on Friday.
The statement revealed that In August 2023, ANEEJ in partnership with the African Centre for Energy Policy (ACEP) commissioned two research studies for an assessment of the Utilization of the Special Drawing Rights in Nigeria and Ghana, as part of activities in the implementation of “Tracking Special Drawing Rights Funds and Raising Citizen’s Voices to End Debt Crises in West Africa’ supported by Open Society Foundation for West Africa (OSIWA.)
Mr Leo said that the report shows among others that the IMF has no clear guideline on how the SDRs should be utilized by member countries, hence, they are used for sectors in less need of them, just as the SDRs are allocated to countries in less need of them.
The Executive Director said It was also discovered that there was a dearth of knowledge about SDRs among stakeholders in Nigeria, including the Executive Arm, the Legislature, Civil Society, and Media while legislative oversight by the legislature was lacking.
This, according to him, is regrettable that the Central Bank of Nigeria has refused to disclose to Nigerians how the SDR was utilized as the custodian of the SDR facility.
“This press conference is also in furtherance of goals of the project to sensitize the citizens on the need to hold the government accountable on issues of SDRs and debt management in the country.
“In the light of this, ANEEJ makes the following demands: Reiterate our call on the Central Bank of Nigeria to publish details of the allocation and utilization of the $3.35bn SDR allocated to Nigeria by IMF and tell Nigerians how it has been utilized.”
“The Legislature to exercise their constitutional role of oversight on the CBN and other agencies saddled with the responsibility of debt management in the country.
“Speed up the process of rechanneling of SDRs through the African Development Bank for the development of social sectors like education, health, and infrastructure, even as we appreciate the approval of the framework for the rechanneling by the Fund.
“The IMF and the developed countries should consider the redistribution of IMF quota on ‘needs’ basis and not on GDP as this would help developing countries cope with the Polycrises they currently face,” the statement said.
It would be recalled that in August 2021, the Board of Governors of the IMF approved a general allocation of $650 in Special Drawing Rights to help boost the liquidity of member countries following the economic crisis caused by the global COVID-19 virus.
SDRs are a component of external assets or reserve assets in the balance of payment account that are readily available to and controlled by a country’s monetary authority and African countries received about $33.8bn while 14th May, 2024.
At the just concluded African Development Bank Annual Meeting (AfBAM2024), in Nairobi Kenya, ANEEJ in collaboration with her partners joined in the advocacy for The Reform of SDRs and the entire global financial architecture to help developing countries cope with their developmental challenges.
