COVID-19: Buhari seeks IMF support for developing countries

September 30, 2020

2.2 min readCategories: News

The President, Major General Muhammadu Buhari (retd.), has called for the reallocation of unused International Monetary Fund’s reserve assets also known as Special Drawing Rights currently held by developed countries to support COVID-19 recovery efforts in developing economies.

The President, represented by Vice President Yemi Osinbajo, made the call 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.

Osinbajo’s spokesman, Laolu Akande, disclosed these in a statement on Tuesday.

The SDR is an international reserve asset created by 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 $204bn.

Since the global financial shocks that followed the COVID-19 pandemic, some developing countries, including Nigeria, have called for their contributions.

However, as of August, there was still an estimated $176bn balance from the asset belonging to developed countries who had not used their contributions.

The statement quoted the Buhari as saying, “COVID-19 pandemic has severely disrupted our 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.”

He added, “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 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.”

Restating his views on tackling illicit financial flows, the President said to overcome the challenges, the scourge must be fought with all determination.

He said, “We must act swiftly to adopt measures to ensure that taxes are paid where value is created, and this is especially 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.”

He added that given the challenges that Nigeria had faced in its effort to repatriate illicitly acquired assets, the country endorsed the recommendation for spontaneous disclosure and the enhancement of legal frameworks for non-conviction-based asset forfeitures.

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