The International Monetary Fund (IMF) is to inject $650 billion in Special Drawing Rights into the global economy. Because of the way the quotas for member states work, about 60% of these funds will go to rich countries that do not need them. African countries will receive $33.6 billion. Most of this will go to the five largest economies on the continent – South Africa, Nigeria, Algeria, Morocco and Egypt.
The IMF and many countries recognise that this way of sharing the funds is not ideal and are looking at a way of reallocating them to poorer countries.
The Special Drawing Rights present an opportunity for the IMF to regain some of its lost influence in global economic governance. It’s also an opportunity for African countries to change their relationship with the IMF.
In today’s episode of Pasha, The Conversation Africa editor Jabulani Sikhakhane sat down with Danny Bradlow, SARCHI Professor of International Development Law and African Economic Relations at the University of Pretoria, to discuss what the Special Drawing Rights are and how they work. They also look into the history of the mechanism and how it can be more responsive to African needs.
“IMF International Monetary Fund symbol or sign.” By Maxx-Studiofound on Shutterstock