Author: Fernando C. Saldivar, S.J., Bryan P. Galligan, S.J., and Charlie Chilufya, S.J.
Categories: Climate Justice
Publication Type: Report
The economic shock generated by the COVID-19 pandemic is unprecedented. Pandemic control and recovery measures, as well as their associated economic costs, have increased pressure on national budgets, leaving many countries in fiscal distress, especially in Sub-Saharan Africa. In response to this need, in August 2021, the International Monetary Fund (IMF) authorised a historic allocation of Special Drawing Rights (SDRs), which are designed to help IMF member countries meet their liquidity needs in times of crisis. Unfortunately, however, the vast majority of this allocation went to those who did not need it: wealthy countries in the Global North. Developing countries, including those in Sub-Saharan Africa, received comparatively little, despite contending with much higher levels of fiscal distress. This policy brief argues that the United Kingdom (UK) should lead other wealthy countries in rechannelling its SDR allocation to the African nations that most need it. It further argues that the rechannelling of SDRs can be used as a tool for building an economic recovery from the COVID-19 pandemic that is environmentally sustainable and socially just. Specifically, the rechannelled SDR allocations could be used to help countries and communities respond to climate change, with a focus on the urgent need for adaptation. After providing an introductory explanation of the August 2021 SDR allocation, this policy brief illustrates Africa’s need for climate finance by detailing the impacts of climate change in southern Malawi and the Upper Nile region of South Sudan. These two case studies demonstrate the urgency of the need for climate change adaptation in Africa as well as the potential costs that will come if the situation is allowed to deteriorate further. This brief then closes by making concrete recommendations for how the United Kingdom – and eventually other wealthy beneficiaries of the August 2021 SDR allocation – can rechannel SDRs to support frontline communities in Africa as they face the consequences of a crisis, they did nothing to cause.