Buhari backs calls for reallocation of IMF reserve to support developing countries
President Muhammadu Buhari has called for the reallocation of unused International Monetary Fund (IMF) reserve assets, also known as Special Drawing Rights (SDRs), to support recovery efforts in developing economies.
The President, represented by Vice President Yemi Osinbajo, made the submission on Tuesday at the virtual high-level 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 Osinbajo’s spokesman, Laolu Akande, the SDR, currently held by developed countries, is an international reserve asset created by the IMF to supplement its member-countries’ official reserves.
The facility was designed to help in stabilising the global economy during financial shocks and IMF member-countries had previously contributed to make up the reserve totaling about $204billion.
Since the global financial shocks that followed the COVID-19 pandemic, some developing countries, including Nigeria, had called for its contribution.
However, as at August, there was still an estimated 176 billion dollars balance from the asset belonging to developed countries who have not used their contributions.
According to the President, 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 Sustainable Development Goals.
“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,” the President stated.
“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 (DSSI) 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”.
The president said that to overcome Illicit Financial Flows(IFFs), there must be concerted efforts.
He said that nations must act swiftly to adopt measures to ensure that taxes were paid where value was created, as it was important for the digital economy.
“We must also establish public beneficial ownership registers; and strengthen arrangements for the exchange of tax information.
“Similar priority should also be given to tackling money laundering and corruption.
“Indeed, given the challenges that my country has faced in its effort to repatriate illicitly acquired assets, we endorse the recommendation for spontaneous disclosure and the enhancement of legal frameworks for non-conviction-based asset forfeitures,” he said.
The high-level meeting convened by United Nations Secretary-General António Guterres, had in attendance other world leaders including Prime Minister of Canada, Justin Trudeau, Prime Minister of Jamaica, Andrew Holness, among others who made presentations virtually.