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Dr Vera Songwe, Executive Secretary of the Economic Commission for Africa
The expert committee meeting of the Conference of African Ministers ended on Friday with experts pledging to do more to accelerate implementation of the AfCFTA.
They will also help improve domestic resource mobilization, deepen digitization and accelerate the implementation of the 2030 and 2063 SDGs.
Dr Vera Songwe, Executive Secretary of the Economic Commission for Africa (ECA), welcomed the decision by G7 finance ministers to support the issuance of new Special Drawing Rights (SDRs) to help developing countries better respond to the COVID-19 crisis.
Ministers agreed to support a new allocation of SDRs to help vulnerable countries respond adequately to the health and economic crisis triggered by the pandemic.
“This is a very important and strategic step on the way to the new issuance of Special Drawing Rights by G7 Finance Ministers today. SDRs are our chance to do something transformational for a lot of border economies. We are grateful for the leadership shown by the G7 ministers, ”said Dr Songwe.
Dr Songwe has been at the forefront of advocating for international financial institutions and others to provide more liquidity to enable struggling African countries to better progress after COVID-19.
“We now need to work on on-lending mechanisms so that we can extend SDRs to countries that need them most. Additional financing for the IMF’s PRGF from SDRs is of course essential for low-income countries. We need to provide vaccines to countries and also support recovery with market access instruments that appeal to the private sector, such as the Liquidity and Sustainability Facility.
She added, “SDRs allow us to think out of the box and bigger. There is now real momentum for collective action at the spring meetings of the IMF and the World Bank as well as for the meeting of African finance ministers organized next week by the ECA. “
Created by the IMF in 1969, the SDRs play an influential role in global finance and help governments protect their financial reserves against global currency fluctuations. It is also used as the basis for loans from the IMF’s major crisis credit facilities, with the institution using it to calculate its loans to countries in need and to set interest rates on loans.
ECA has also advocated for the extension of the Debt Service Suspension Initiative (DSSI) until the end of 2021 to ensure that countries have sufficient liquidity to respond and revive the recovery. freeing up resources to pay for much-needed vaccines and improve buffers in low-income countries.
Another important vehicle to help African countries increase their liquidity is the ease of liquidity and sustainability.
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