In an effort to address urgent financing needs and advance the sustainable development of countries in the era of COVID-19 and beyond, President Muhammadu Buhari has called for the reallocation of unused International Monetary Fund (IMF) reserve assets also known as Special Drawing Rights (SDRs), currently held by developed countries, to support recovery efforts in developing economies.
The President, represented by Vice President Yemi Osinbajo, SAN, stated this 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.
The SDR is an international reserve asset created by the International Monetary Fund (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 making up the reserve totaling about $204B.
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And since the global financial shocks that followed the COVID-19 pandemic, some developing countries including Nigeria had called for its contribution. However, as of last month, there was still an estimated $176B balance from the asset belonging to developed countries who have not used their contributions.
According to the President, the “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,” the President stated.
He added that “the increased flow of remittances can support development financing needs so it is important to reduce the costs of making such transfers.”
Further justifying the need for a collective action to support developing economies, President Buhari said “we support the call for debt relief for developing countries, and the extension of the Debt Service Suspension Initiative (DSSI) until 2021 as well as the granting of commercial debt relief where needed.”
Continuing, the President said “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 (IFFs), the President said “to overcome these challenges, we must combat IFFs with all the determination we can muster.
“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. Indeed, given the challenges that my country has faced in its effort to repatriate illicitly acquired assets, we endorse the recommendation for spontaneous disclosure and the enhancement of legal frameworks for non-conviction-based asset forfeitures,” the President added.
The high-level meeting convened by United Nations Secretary-General António Guterres, had in attendance leaders across the world including President Buhari, the Prime Minister of Canada, Justin Trudeau, the Prime Minister of Jamaica, Andrew Holness, among others who made presentations virtually.