354
Daniel Adaji
The President of the African Development Bank (AfDB), Dr Akinwumi Adesina, has condemned the International Monetary Fund’s (IMF) allocation of Special Drawing Rights (SDRs).
He stated that Africa received an unfairly low share—just 4.5 per cent of the $650 bn issued globally.
“Out of the $650 bn in SDRs issued globally, Africa received only $33 bn, just 4.5 per cent. This is, despite being the continent most in need and with the least resources to manage the economic fallout,” Adesina said in a statement issued Sunday.
SDRs are international reserve assets created by the IMF to supplement the official reserves of its member countries. Though not a currency, they can be exchanged for freely usable currencies such as the US dollar, euro, yen, or pound sterling.
One SDR currently equals about $1.33, making the total allocation worth over 460 bn SDRs.
Adesina criticised the current distribution framework, saying it overlooks Africa’s vulnerability during global crises like the COVID-19 pandemic. With limited fiscal space and ballooning debt, many African countries struggled to implement effective recovery plans.
To address this imbalance, he revealed that the AfDB, in collaboration with the African Union, has led efforts to rechannel unused SDRs from wealthier nations to African economies. A new framework developed with the Inter-American Development Bank (IDB) has now been approved by the IMF Board, leveraging the AfDB’s AAA credit rating.
“This is a game-changer, as each dollar of SDR rechanneled can be leveraged four to eight times. That means a $50 bn reallocation could unlock up to $200 bn in new development financing—at no cost to taxpayers,” he said.
Describing the initiative as a landmark reform, Adesina said it could help close Africa’s financing gap amid shrinking aid and rising global debt pressures.
In a separate push to strengthen financial resilience, the AfDB is also mobilising $27 bn through the African Development Fund (ADF) to support 37 low-income African nations. This is part of the ongoing ADF-17 replenishment cycle.
Adesina also raised alarm over Africa’s mounting external debt, which stood at $824 bn in 2021.
He said the continent now spends 65 per cent of its GDP on debt servicing, with $74 bn expected to be paid this year—up from $17 bn in 2010.
“With greater investment in health, innovation, and financing, Africa can protect its people, unlock its potential and chart its path to prosperity,” he added.
Adesina’s remarks align with a recent report by Oxfam, Connected Development, and INKA Consult, which revealed Nigeria’s severe shortfall in climate financing.
According to the report, Nigeria receives just 4 per cent—or $704m —of the $17.7 bn it needs annually to combat climate-related disasters such as droughts, erosion, and rising temperatures.
“On average, Nigeria receives only 4 per cent ($704m) of the $17.7bn it needs each year to adapt to the growing number of climate-related disasters it faces,” the report noted.
It added that between 2015 and 2021, Nigeria received a total of $4.9 bn in climate finance, of which 75 per cent came as loans—further deepening the country’s debt burden. Currently, 36 per cent of Nigeria’s debt is at risk of distress, with over a third of the national budget committed to debt servicing.
Country Director for Oxfam in Nigeria, John Makina warned that inadequate and unsustainable financing could derail the country’s climate goals and put millions of lives at risk.
“This report serves as a clarion call to both national and international stakeholders to prioritise climate justice and debt relief for Nigeria, ensuring that funding translates to tangible and long-term climate solutions on the ground,” Makina said.