Several African countries had called for a general allocation of Special Drawing Rights (SDRs) by the International Monetary Fund (IMF) to take effect quickly. The financial institution responded positively to this request. The IMF has decided to pay out $ 176.1 million or FCFA 98.88 billion in favor of Benin. This allocation of SDRs makes it possible to meet global demand for long-term reserves.
The SDR allocation will also build confidence and strengthen the resilience and stability of the global economy. According to Kristalina Georgieva, Managing Director of the IMF, if approved by the institution’s Board of Governors, this assistance will particularly “help our most vulnerable member countries as they are working to overcome the effects of the COVID crisis.19”. So she insisted that the use of the SDR allocation “should be done with caution and with full transparency”. Kristalina Georgieva said she had “recommended that the authorities use it to meet urgent needs and recover foreign currency reserves,” in line with the initiative’s objectives. For the director, “the highest allocation of special drawing rights (SDR) in history (around $ 650 billion) applies today (23 August 2021, editor’s note)”.
She believes this allotment is a real injection into the arm of the global economy. If used wisely, it is a unique opportunity to overcome this unprecedented crisis. The beneficiary countries must be able to justify their commitment with specific projects. “To help countries and ensure compliance with the principles of transparency and accountability, the IMF is proposing a mechanism to assess the macroeconomic impact of the reallocation, its statistical treatment and governance, and its impact on debt sustainability,” said Director firmly Kristalina Georgiewa.