President Muhammadu Buhari has backed the call for reallocation of unused International Monetary Fund reserve assets, also known as Special Drawing Rights, to support recovery efforts in developing economies against the COVID-19 pandemic.
Represented by Vice President Yemi Osinbajo, Buhari made the call on Tuesday at the virtual meeting of Heads of State and Government on financing the 2030 Agenda for Sustainable Development in the era of COVID-19 and beyond.
According to a statement by Laolu Akande, media aide to Osinbajo, the SDR, currently held by developed countries, is an international reserve asset created by the IMF to supplement its member countries’ official reserves.
“We must mobilise finance in response to this pandemic induced economic crisis and for long-term development.
“We call for enhanced global liquidity including through the reallocation of unused Special Drawing Rights currently held by developed countries,” Buhari stated.
He noted that the facility was designed to help in stabilising the global economy during financial shocks, noting that the IMF member countries’ contributions have helped to make up the reserve to about $204bn.
According to the president, since the global financial shocks that followed the COVID-19 pandemic, some developing countries, including Nigeria, had called for its contribution.
He stated, however, that, as of August, there was still an estimated $176bn balance from the asset belonging to developed countries that have not used their contributions.
The COVID-19 pandemic has severely disrupted societies and economies, worsened inequalities, and deepened the gap between available resources and the resources needed to finance the SDGs.
Buhari explained further, “The increased flow of remittances can support development financing needs so it is important to reduce the costs of making such transfers.
“We support the call for debt relief for developing countries, and the extension of the Debt Service Suspension Initiative until 2021 as well as the granting of commercial debt relief where needed.
“As global leaders, we must do everything in our power to emerge from the crisis caused by COVID-19 by striving together in order to deliver for all.”
