JENA, along with its United Kingdom partners, is lobbying the UK Government to rechannel more of its IMF Special Drawing Rights (SDRs) allocation and lead other rich nations to do the same to combat climate change and biodiversity loss in Sub-Saharan Africa, an area of concern that the UK has consistently identified as a priority through its leadership role in the Integrated Review 2021. This is because the UK’s reserves received a £19 billion boost of new SDRs. The International Monetary Fund (IMF) created a new allocation of SDRs in August 2021 to tackle COVID-19 and its impacts. Unfortunately, the vast majority of this allocation went to those who did not need it: wealthy countries in the Global North like the UK. Developing countries, including those in Sub-Saharan Africa, received comparatively little, despite contending with much higher levels of fiscal distress.
JENA’s proposal is in line with some of the UK’s plans for the use of its SDRs except JENA and its partners feel that the UK can do more and even lead other rich nations to do the same. The UK government has planned to lend 4 billion SDRs via the IMF to facilitate low interest loans through the IMF’s Poverty Reduction and Growth Trust and a new Resilience and Sustainability Trust. If the UK moves in the direction of JENA and its partners’ proposal, it will ensure that the COP26, which it hosted in Glasgow last year is a real success and can raise the ambition on climate change that is needed. This would also build trust and increase the chances of a successful UK legacy from COP26.
JENA has just issued this policy brief that 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. The JENA 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. The 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.
Read the full policy brief here.