Explore how Special Drawing Rights (SDRs) are an important financing tool for African countries to respond to ongoing and future crises. SDRs are an IMF tool that provide a much needed injection of liquidity, without adding to debt burdens.

A confluence of crises is reversing hard-earned development gains. The historic August 2021 allocation of US$650 billion in Special Drawing Rights (SDRs) offered a critical and sizeable source of financing to help countries weather and recover from these shocks. 

SDRs are a type of reserve asset issued by the International Monetary Fund (IMF) to help supplement countries’ official reserves. They provide a much needed injection of financial liquidity without adding to debt burdens. While they are not cash, they can be traded for hard currency such as dollars, pounds, or euros.

SDRs are a useful tool to plug fiscal gaps, meet external debt obligations, or address foreign exchange shortages. For example, if Liberia is facing a foreign currency crunch, it can sell a portion of its SDRs to France – in exchange for euros – and use those euros to pay for imported goods, such as fertiliser.

The majority of African governments have disclosed how they are using their SDRs. This includes boosting their foreign exchange reserves, enhancing health and social protection systems, or paying off debt. 

The rest of this resource is a live-updated data dive from the One Campaign. You can view it in full on their website HERE.

On Wednesday, February 15, 2023, World Bank President David Malpass announced he would step down from his position at the end of June 2023, about a year before his term ends. Mr. Malpass has led the Bank over the last four years amid compounding crises, including the global pandemic, economic downturn, and accelerating impacts of climate change.

The next World Bank President will assume the role as the institution transforms its mission and purpose as part of an effort to evolve the MDB system, an initiative spearheaded by U.S. Treasury Secretary Janet Yellen. At the end of 2022, the World Bank released its Evolution Roadmap, detailing a plan to reshape its mission and scale up financing to address growing global challenges.

The members of the IFI Working Group have described expectations for the next World Bank President and reacted to the announcement:

Bank Information Center: Statement on the Resignation of World Bank President David Malpass

Center for Global Development: What the Biden Administration Should Be Looking for in a World Bank President

The ONE Campaign: Tweet from ONE’s President Tom Hart

E3G: Tweet from Public Banks Program Leader, Sonia Dunlop

Oxfam: World Bank "evolution" test will be hiring process of new President: Oxfam

The IFI Working Group Reacts to the Resignation of World Bank President David Malpass

Associate Director, Development Finance and Multilateral Institutions

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While the incoming Biden administration faces remarkable challenges globally, the ONE Campaign is optimistic that between a renewed commitment to American global leadership and the advent of effective COVID-19 vaccines, we can make measurable and impactful progress in ending end extreme poverty and preventable disease.

Transition_Doc_v1.pdf

The IMF has the ability to issue what are called Special Drawing Rights (SDRs). These were designed to help countries respond to global crises.

ONE Campaign

Contacts

Kerezhi Sebany

Special Drawing Rights

The IFI Working Group Reacts to the Resignation of World Bank President David Malpass

Vision for US Leadership

What exactly are Special Drawing Rights?