Ruto castigates IMF for giving more SDRs to European countries as compared to Africa
President William Ruto has accused the International Monetary Fund (IMF) of giving more special drawing rights (SDRs) to European countries as compared to African nations.
Speaking during the Trade Development Bank Group Annual General Meeting in Nairobi on Thursday, Ruto called for a change of the IMF policy to implement equality.
According to the President, European nations took 160 billion of the 2021 issue of SDRs while African countries got only 34 billion.
"At the International Monetary Fund, European nations took 160 billion of the 2021 issue of the special drawing rights, compared to African countries’ cumulative amount of 34 billion. An institutional blueprint which administers development financing this way must be changed urgently, and one made, that is fit for purpose," Ruto said.
The SDR is an international reserve asset created by the IMF to supplement the official reserves of its member countries.
The SDR is not a currency, but a potential claim on the freely usable currencies of IMF members. As such, SDRs can provide a country with liquidity.
A basket of currencies defines the SDR including the US dollar, Euro, Chinese Yuan, Japanese Yen, and British Pound.
Ruto also said that the continent needs a development financing institutional framework to handle its financial needs.
"Africa needs a development financing institutional framework that can handle and deliver transformations in terms of integration through connectivity, economic development, and climate resilience," he added.
Since the inception of SDRs in 1969, a total of SDR 660.7 billion (equivalent to about US$943 billion) have been allocated. The largest-ever allocation of about SDR 456 billion was approved on August 2, 2021.
