04/11/2021
Strive Masiyiwa writes
News: An important milestone!
On 9th April 2021 the IMF members will approve a special facility known as Special Drawing Rights [SDRs], which will be distributed to all countries. It will be 650bn SDRs [equivalent to US $500bn].
Without commenting on the fairness or otherwise of the distribution mechanism, Africa will get about US $30bn [equivalent to 5.2%]. This money is desperately needed and will go some way to helping our countries secure some foreign exchange.
Some of you who have been on this platform know that I started talking about this mechanism as a way to help African economies battered by Covid-19, more than a year ago: Then I called for $100bn to be made available for Africa. You see this money is not debt, or loans.
Now US $30bn is far short of the US $100bn... but we [the people who have campaigned for this money to be released through the IMF reserves], have a plan: Once today’s decision is made, we are asking the rich countries who receive 75% of the of the US $500m, which they don’t actually need, to lend it to us [legally it is more difficult for them to just give them to us]. They can lend them to us for a nominal interest rate of 1% or less, and for a very long time.
You will recall that President Ramaphosa appointed 7 Special Envoys, including myself, at the beginning of this COVID crisis. My colleagues included Dr Ngozi Okonjo-Iweala, Dr Donald Kaberuka, Mr Trevor Manuel and Mr Tidjane Thiam — all financial and economic experts — THIS IS WHY!
Their job was to navigate the halls of the IMF, World Bank and global capitals pushing for this and other solutions. There were other African experts including Dr Vera Songwe, and leading Finance Ministers who met regularly with the Envoys. Globally, we also had highly influential finance experts like Gordon Brown [former PM of the UK] and Prof Jeffrey Sachs, and numerous others, who just kept a constant drumbeat, demanding a solution.
The French President was our main champion of the EU leaders, whilst President Ramaphosa led the African charge. The breakthrough came with the election of President Biden, because the former US President was not interested in supporting anything outside his own country’s direct interest.
We are confident that the next milestone of an extra US $100bn, will probably be agreed before the end of October. This will all come to Africa.
Today is an important day, guys. You as entrepreneurs should know that. It does not mean you will get a loan, but you will see improvements in your country’s economy.
If you want to know more details, including your own country’s allocation, please go to the IMF website, or Dr Vera Songwe’s UNECA [she is a hero on this!]
