Oxfam reaction to AU-EU Summit outcome on Special Drawing Rights

Published: 18th February 2022

Today, EU countries at the AU-EU Summit, failed to make concrete commitments to reallocate their portion of Special Drawing Rights (SDRs) to low and middle-income countries. Instead, they simply reiterated the broad voluntary commitment made at the G20 last year.

In response, Jeroen Kwakkenbos, Oxfam EU aid expert said:
“It is sorely disappointing to see EU countries failing to step up and publicly commit, either individually or collectively, to reallocate a concrete amount of Special Drawing Rights to poorer countries. We are equally disappointed to see little discussion on alternative mechanisms for channeling those SDRs outside of the International Monetary Fund (IMF).

“As things stand, we are left with only IMF channels, which can and ought to only absorb so much, and with funds being provided as loans with risky strings attached. This comes at a time when the pandemic has hit governments’ pockets hard, and debt is skyrocketing. African governments, on average, spend almost four times the amount in debt repayments than they spend on public services.

“Reallocating at least 100 billion dollars of Special Drawing Rights from rich countries - with EU countries coughing up their fair share - would allow poorer countries to free up money to invest in badly needed public services like hospitals and schools. These resources must be directed through various channels, with as little debt as possible, and to all countries that need this breathing space. The best use of SDRs can only be achieved by not attaching austere economic conditionality, providing maximum transparency on how they are used and bringing in the people through public consultation at the national level.”

Notes to editors

The International Monetary Fund (IMF) issued 650 billion USD in SDRs in response to the Covid-19 pandemic. This freed up fiscal space delivering almost 400 billion USD in added reserves to the world’s richest economies, 230 billion USD to middle-income countries, and 21 billion USD to low-income countries.  

African governments, on average, spend almost four times the amount in debt repayments than they spend on public services.  

The French President Emmanuel Macron and European Council President Charles Michel want EU countries to share their SDR allocations with Africa.   

Last October, G20 countries committed to allocating 100 billion US dollars in SDRs to "vulnerable countries whose economies have been hard hit by the Covid-19 crisis.”   

Last September, Oxfam alongside 280 other CSOs and academics outlined the key principles needed for fair channeling of Special Drawing Rights. 

For more information on SDR reallocation, read Oxfam’s latest blog “How to get the biggest bang for your IMF buck”. 

IMF calculations estimate 285 billion US dollars is needed to respond to the health crisis on the African continent. 

The AU-EU Summit convenes Heads of States and Governments from the AU and EU. This year is the sixth edition of the summit and was held on the 17 and 18 February.

Contact information

Jade Tenwick | Brussels, Belgium | jade.tenwick@oxfam.org | mobile +32 473 56 22 60     

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