Share
Igniting financing for African countries through SDRs
About 60 per cent of African countries risk defaulting on their debt if the slow roll out of alternative financing from rich countries is not unlocked on time. CNBC AFRICA had a panel discussion on the role of special drawing rights in lowering the cost of capital.
Fri, 03 Feb 2023 14:51:24 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- SDRs present a cost-effective and long-term financing solution for African countries grappling with debt distress and urgent financial needs.
- The slow distribution of SDRs poses a significant challenge, with only a fraction of the pledged funds reaching countries like Africa.
- A strategic approach involving multilateral development banks like the African Development Bank can unlock SDRs to finance critical sectors such as clean energy and job creation.
African countries are facing a looming debt crisis with about 60 per cent at risk of defaulting if alternative financing from rich countries is not unlocked on time. CNBC Africa hosted a panel discussion on the critical role of special drawing rights (SDRs) in lowering the cost of capital and providing much-needed financial support to the continent. As the slow rollout of SDRs continues to hinder progress, the urgency for action has never been greater. The event organized by Afrika Televis in collaboration with the Centre for Global Development highlighted the potential of SDRs as a vital source of additional financing for African countries. In 2021, a total of 650 billion in SDRs was allocated, with Africa receiving 33 billion from that amount. Following this issuance, the G20 committed to re-channel approximately 100 billion of SDRs to low-income and middle-income countries. The objective of the event was to explore how leveraging SDRs could address the multifaceted challenges African nations are currently facing, including the ongoing pandemic, the crisis in Ukraine, climate change, debt burdens, and infrastructure development. These pressing needs underscore the importance of using SDRs innovatively to bolster financial stability and promote sustainable growth.
SIGN UP FOR OUR NEWSLETTER
DAILY UPDATE
Get the best of CNBC Africa sent straight to your inbox with breaking business news, insights and updates from experts across the continent.
Get this delivered to your inbox, and more info about about our products and services. By signing up for newsletters, you are agreeing to our Terms of Use and Privacy Policy.
