Ghana, along with its peers on the African Continent are expected to benefit from the International Monetary Fund’s (IMF) $650 billion Special Drawing Rights (SDR) for the acquisition of Covid-19 vaccines.
Per reports, Ghana along with other African countries will receive $23 billion out of the $650 billion SDR allotted by the IMF.
The dedicated $650 billion SDR by the IMF is based on a global proposal that targets vaccinating of at least 40 percent of the total population of all countries by end-2021, and at least 60 percent by the first half of 2022.
Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, some months ago appealed to the Executive Directors of the IMF, to allow for the additional allocation of Special Drawing Rights (SDR) equivalent to $650 billion to further support member countries’ fight against the Covid pandemic.
According to Ms Georgieva, the new SDR allocation will provide additional liquidity to the global economic system by supplementing the reserve assets of the Fund’s 190 member countries.
Additionally, it will help support global recovery from the COVID-19 crisis.
“If approved, a new allocation of SDRs would add a substantial, direct liquidity boost to countries, without adding to debt burdens. It would also free up badly needed resources for member countries to help fight the pandemic, including supporting vaccination programs and other urgent measures. And it would complement the range of tools deployed by the IMF to support our membership in this time of crisis,” stated Ms Georgieva.
“It would also be a powerful signal of the IMF membership’s determination to do everything possible to overcome the worst recession since the Great Depression,” she emphasised.
With the provision of the $23 billion SDR, Ghana and the other African countries are expected to receive 30 percent vaccination coverage through COVAX and another 30 percent coverage through the African Vaccine Acquisition Task Team (AVATT) established by the African Union (AU).
COVAX has already received pledges for over half a billion doses, but the Bretton Wood institution has said these need to turn into actual deliveries as soon as possible to make a difference.
The Fund has also urged vaccine manufacturers to speed up supply to Africa for the rest of this year, urging advanced economies with vaccine manufacturing capabilities to encourage their manufacturers to do so, especially when demand at home is falling short of supply.
The IMF has further assured the continent of making the $23 billion SDR funds available at zero-rate interest for the purchase of some 250 million vaccines by September 2021.
“We’ve ramped up our lending to sub‑Saharan Africa—last year it was more than 13 times our annual average—and support to increase our access limits will allow us to scale up our zero-interest lending capacity. And the unprecedented $650 billion new SDR allocation, far and away the largest in the Fund’s history, once approved will make $23 billion available to member countries in sub‑Saharan Africa,” stated the IMF.
The provision of the additional SDR allocation will imply more fiscal resources at the disposal of Ghana to fight the Covid-19 pandemic.
Presently, Ghana has SDR holdings worth Ghs 60.13 million ($10.3 million) with the IMF.
Special Drawing Rights (SDR) are supplementary foreign exchange reserve assets defined and maintained by the International Monetary Fund.
SDRs are units of account for the IMF, and not a currency per se. They represent a claim to currency held by IMF member countries for which they may be exchanged.
