Africa should get a bigger slice of IMF and World Bank funding: Ramaphosa
President Cyril Ramaphosa is pushing for African countries to receive substantial funding from the World Bank and International Monetary Fund (IMF) to aid recovery after the Covid-19 pandemic.
On Monday, he said $162.5bn (about R2.3 trillion) should be made available instead of the $33bn (about R462bn) which has been proposed from the “special drawing rights” which will be released to increase reserves of African countries.
Ramaphosa shared these sentiments in his weekly newsletter after attending a Paris Summit where African leaders discussed the finances of their countries.
“South Africa reiterated its support for a comprehensive and robust economic stimulus package for Africa to aid the recovery. But we said this should not be a substitute for official development aid.
“We welcomed the steps taken by financial institutions like the World Bank and IMF to support low- and middle-income countries, and called for further measures to support vulnerable countries. This would include an allocation by the IMF of what are known as special drawing rights, where on the basis of membership quotas, about $33bn will be released to increase the reserves of African countries,” he said
African leaders have argued that $33bn, while welcome, is not sufficient to meet the challenges the continent faces. As the more developed economies are set to receive much of the $650bn (about R9 trillion) of special drawing rights to be issued, “we believe 25% [which equates to $162.5bn] should be made available to African countries”, he said.
Ramaphosa said other measures to aid recovery would include increased concessional financing by international institutions and development agencies, and additional measures led by the G20 countries to provide African countries with debt relief.
He maintained that while Africa needed much more financial assistance, it wanted to maintain its independence as a continent.
“As African countries, we want to help ourselves and not be told what is good for us. The principle of ‘nothing about us without us’ should be applied. It is important that we affirm our sovereignty as free and independent states capable of determining the destiny of our continent.”
The African Continental Free Trade Area was set to play a significant role in the continent’s recovery. Ramaphosa said the continental network of African public development banks would play a far greater role in mobilising funding to support key projects in health, education and infrastructure among other sectors.
“African leaders acknowledge the centrality of good governance, public debt management, financial integrity and creating a more favourable climate for private sector investment in their economies. The Covid-19 pandemic has resulted in unprecedented levels of unity and co-operation between African countries. It has seen the continent strengthen its ties with the broader international community and global institutions,” he said.
“As we observe Africa Day, let us deepen our efforts to achieve a sustainable and lasting social and economic recovery for the citizens of Africa. Ours must become a continent that is thriving and prosperous, not one from which its people are dying in an attempt to leave.”