Ghana has received the equivalent of US$1billion from the International Monetary Fund (IMF), being its share of the new Special Drawing Rights (SDRs) allocation to boost the COVID-era economic recovery of member-countries.
On 2nd August 2021, the IMF Board of Governors approved a general allocation of SDR456.5 billion, equivalent to US$650billion – out of which about US$33.7billion is for African countries to boost global liquidity and economic recovery, following the COVID-19 pandemic’s devastating impact on lives and livelihoods.
The new SDR allocation became effective on 23rd August, 2021 and will augment the additional financing needs of countries, especially low-income countries, caused by the pandemic’s impact on public finances.
The AfDB estimates that African governments require additional financing of about US$484.6billion within the next three years to close the financing gap and emerge from the COVID-19 crisis stronger and more resilient.
According to the IMF, the SDR allocation will benefit all members; address the long-term global need for reserves; build confidence; and foster resilience and stability of the global economy. This historic SDR allocation will particularly help countries that are most vulnerable to immediately address impacts of the pandemic toward economic recovery.
This SDR allocation is in response to a global call to action following the devastating effects of the pandemic, including an Africa-wide effort championed by Minister Ken Ofori-Atta and his colleague African Finance Ministers, the AU and UNECA, supported by key international partners (including the IMF, World Bank, G20 and EU).
The Special Drawing Right (SDR) is an interest-bearing international reserve asset created by the IMF in 1969 to supplement member-countries’ official reserves. The general allocations of SDRs are distributed across the IMF membership in proportion to their IMF quota.
“The government of Ghana expresses its gratitude to the IMF for this historic advocacy and SDR allocation. It provides additional policy space to support Ghana’s efforts to counter impacts of the COVID-19 pandemic on lives and livelihoods. It will support the GH¢100billion Ghana Cares (Obaatanpa) post-pandemic recovery programme,” Ken Ofori-Atta, Minister for Finance, said in response to news of the SDR allocation becoming effective.
The Ministry of Finance will ensure that all statutory requirements are complied with in use of the SDR.