President Nana Addo Dankwa Akufo-Addo has urged the International Monetary Fund (IMF) to channel portions of the Special Drawing Rights (SDR) to the African Development Bank (AfDB) to support economies in Africa.
According to him, the AfDB would be able to “leverage the resources to provide greater financing to African economies” when given the mandate as the prescribed holder of the SDR.
The President’s suggestion was contained in the Accra Declaration issued after the 2022 AfDB Annual General Meetings held from May 23 to 27.
The declaration said funds from the SDR if channelled through the AfDB, would be used to meet the development needs of African countries, including their food security and climate change and finance and capitalise on African development banks.
It expressed concerns over the challenges posed by the COVID-19 pandemic, the repercussions of the Russian-Ukraine war, and the severe disruptions to the development trajectories on the continent.
The statement also expressed worry over the looming food crises, energy prices, and the prevalence of insecurity on the continent.
The declaration, however, welcomed the decision of the AfDB Group to explore options for the strategic use of the SDRs to support Africa and noted that providing SDRs through multilateral development banks had severe benefits, including leveraging the SDR.
It called on the Governors of the AfDB to facilitate the amendment of the Articles that precluded the AfDB from accessing the international capital markets to leverage its balance sheet and raise capital for the development of the continent.
The Minister of Finance, Ken Ofori-Atta, in a short remark at the closing of the meeting, noted that initiatives such as rechannelling SDRs through the AfDB and granting the AfDB market access would go a long way to help mobilise the requisite capital for development and enhance the prospect and development of economies on the continent.
“We must continue to push for a framework that respects historic responsibility and focuses on countries with much bigger footprints on past and present emissions.”
“The balance sheet of climate change demands of us to seek this fairness. According to the AfDB’s estimates, Africa would be owed carbon credits valued cost almost US$4.64 trillion between now and 2050, representing an annual flow of US$166 billion. In fact, Africa’s carbon credit is almost 10 times the US$18 billion global climate finance Africa received between 2016 and 2019,” he said.
Mr Ofori-Atta stressed the need for Africans to have a unified voice and table initiatives such as the introduction of carbon credits to ensure the continent is built better, smarter and boldly while avoiding being locked into stranded assets.
The President of AfDB, Dr Akinwumi Adesina, said the bank would use the equity of the African Development Fund, a fund created to give concessional loans and grants to member countries, to raise financial resources for the development of the continent.
He commended the Government of Ghana for hosting the 2022 AGM.