Pan-African businessman and Special AU envoy for COVID-19, Strive Masiyiwa, has hailed the approval today (April 9, 2021) of a US$500 billion Special Drawing Rights facility by IMF members which is set to benefit all countries in the world.
Masiyiwa, the billionaire entrepreneur and founder of the Econet Group, has been an early proponent of a global facility to support African economies ravaged by the COVID-19 pandemic.
Writing on his Facebook blog with over 5.6 million followers, Masiyiwa said:
Today (9th April), 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 (the equivalent to $500bn).
Without commenting on the fairness or otherwise of the distribution mechanism, Africa will get about $30bn (the equivalent to 5.2%).
This money is desperately needed and will go some way in helping our countries secure some foreign exchange.
Some of you who have been on this platform for a while 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. This money is not debt or loans.
And the $30bn is far short of the $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 it to us; but they can lend it to us for a nominal interest of 1% or less, and for a very long time.
You will recall that President Cyril Ramaphosa appointed 7 Special Envoys, including myself, at the beginning of this COVID-19 crisis. My colleagues included Dr Ngozi Iweala, Dr Donald Kaberuka, Mr Trevor Manuel, and Tidjane Thiam — all of them financial and economic experts —THIS IS WHY!
Their job was to navigate the halls of the IMF, the 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. I particularly want to single out the ministers of South Africa and Ghana for their amazing intellectual acumen on this.
Globally we also had highly influential finance experts, like Gordon Brown (former Prime Minister of the UK), Prof Jeffrey Sachs and numerous others, who just kept a constant drum beat, demanding a solution. Organizations like The One Campaign, led by Gayle Smith, drove awareness campaigns and lobbied the rich countries.
The French President Emmanuel Macron was our main champion of the EU leaders, whilst President Ramaphosa led the African charge.
Although people in Africa have long had a negative view on the IMF for some of its past missteps, under the leadership of Kristalina Georgieva, the IMF has been amazing in championing the poor nations. I was truly impressed with her leadership.
The breakthrough came with the election of President Joe Biden, because the former US President was not interested to supporting anything outside his own country’s direct interest.
We are confident that the next milestone of an extra $100bn, will probably be agreed before the end of October. This will all come to Africa.
Today is an important day. As entrepreneurs you should know that. It does not mean you will get a loan, but you will see an improvement in your country’s economy.
If you want to more details, including your own country’s allocation, please visit the IMF website, or that of Dr Vera Songwe, the Executive Secretary for UNECA (the United Nations Economic Commision for Africa). She is a hero on this!