- October 20, 2021
- Posted by: Ato
- Category: Economics
Ghana, together with South Africa, Nigeria, the Democratic Republic of Congo, Zambia and Angola were the biggest recipients of the International Monetary Fund’s Special Drawing Rights in sub-Saharan Africa to aid their economic recovery after Covid-19, the 2021 Annual World Bank Report has revealed.
The six countries claimed about half the amount of SDRs allocated to the region by the IMF.
Ghana received an SDR equivalent of $1.01 billion to support its economy which was battered by the Covid-19 pandemic.
Finance Minister, Ken Ofori-Atta had revealed that government will spend the $1 billion from the Fund, to aid the ongoing Covid-19 economic recovery, instead of the normal practice of using it to shore up the country’s balance of payment or Central Bank reserves.
South Africa received the largest SDR equivalent of $4.2 billion, followed by Nigeria with $3.3 billion from the IMF. DR Congo, Zambia and Angola also received SDR equivalent of $1.4 billion, $1.35 billion and $1.02 billion respectively.
The World Bank report said “although this is a large amount for some countries, the SDR allocation is not a panacea. It is a good start, but it will not be sufficient. As the pandemic lingers, it cannot remain as a permanent solution and, thus, it cannot substitute other financing channels.
“The international community needs to continue exploring different options that would enable rich countries to share their surplus SDRs voluntarily with the poor countries in the region with the greatest financing needs.”
The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries’ official reserves.
To date, a total of SDR 660.7 billion (equivalent to about $943 billion) have been allocated to countries globally. This includes the largest-ever allocation of about SDR 456 billion approved on August 2, 2021 (effective on August 23, 2021).
The most recent allocation was to address the long-term global need for reserves, and help countries cope with the impact of the COVID-19 pandemic.
The value of the SDR is based on a basket of five currencies—the U.S. dollar, the euro, the Chinese renminbi, the Japanese yen, and the British pound sterling.