Day: May 23, 2023

African Ministers of Finance, Planning and Economic Development have called for reforms of the IMF’s Special Drawing Rights (SDR) system to strengthen the global financial safety net and make more liquidity available to developing countries.

The call for reforms was made during a meeting of the Africa High-level Working Group on the Global Financial Architecture on the margins of the 2023 Annual Meetings of the African Development Bank Group held in Sharm El-Sheikh, Egypt.

Coordinated by the Economic Commission for Africa (ECA), the High-level Working Group comprises African Ministers of Finance, Planning and Economic Development, the African Union, the African Development Bank, Afreximbank, and the World Bank, and includes the participation of IMF staff and Executive Directors.

The Group serves as a forum to develop reform proposals for the global financial architecture and strengthen the African voice on the global stage, according to ECA.

During the meeting, ECA’s Deputy Executive Secretary and Chief Economist, Hanan Morsy delivered a presentation on reforming the SDR allocation and rechanneling mechanism.

The SDR system came into existence in 1968 with the aim of supplementing official reserves and facilitating global liquidity. The IMF’s Articles of Agreement stipulate that SDR allocations are meant to be considered every five years, referred to as “basic period”.

Throughout the 12 “basic periods” since the inception of the SDR system, there have been merely four general allocations and one special allocation (with two notable ones in 2009 and 2021).

Morsy also emphasized that, when SDRs are allocated, they tend to disproportionately benefit countries that are less in need of them. This is because SDRs are distributed in proportion to existing IMF quotas, which are primarily a function of an economy’s size and relative position in the world economy.

For instance, during the 2021 general SDR allocation of 650 billion USD, high-income countries, which are least likely to require or utilize SDRs, received approximately 450 billion USD, constituting almost 70 percent of the total allocation.

Africa, with a population exceeding 1.4 billion, received fewer SDRs than Germany, a country with a population of only 83 million, ECA’s Chief Economist indicated.

The ministers emphasized the need for SDR allocation decisions to be made in a rule-based analytical manner to reduce the discretionary and political nature of the allocation process.

The “Unexpected Major Developments” provision needs to be clarified and operationalized to include the following triggers: force-majeure exogenous shocks, such as pandemics or natural disasters, global recessions, and significant capital flow reversals from emerging and developing economies.

The ministers underscored the importance of ensuring that SDRs are directed to countries that require those most.

They advocated for the rechanneling of SDRs to Multilateral Development Banks, such as the African Development Bank, as a means to achieve this goal.

They noted that the proposal for SDR rechanneling put forward by the African Development Bank and the Inter-American Development Bank provides a viable technical solution that would allow leveraging SDRs to provide much needed liquidity to African countries.

They called upon SDR donor countries to participate in the proposal and thereby enable its implementation.

Moreover, the ministers called for reforming the SDR rechanneling mechanism to promote greater utilization. The ministers further urged for a reform of the SDR allocation formula to take into account countries’ liquidity needs in addition to IMF quotas.

Source: Ethiopian News Agency

A two-day high-level national social protection conference underway under the theme “Social Protection for Nation Building in Ethiopia” with the objective to expand and improve social protection programs in the country.

Deputy Prime Minister and Minister of Foreign Affairs, Demeke Mekonnen, AU Deputy Commissioner, Monique Nsanzabaganwa and other high government officials, representatives of various partners and other pertinent stakeholders are attending the conference.

The conference aimed at enhancing awareness about the role of social protection in contributing to sustainable development, social cohesion and nation building.

It also aimed to generate ideas and have a common understanding among stakeholders about the expansion and improvement of social protection programs and systems though collaboration between the government, non-governmental actors, private sectors and development partners.

The conference will also help to cultivate and enhance stakeholders’ understanding and support towards the social protection agenda for better positioning amongst national development priorities.

Moreover, it will contribute to learn lessons from other countries, review status of the key social protection pillars in the Ethiopia context and devise a way forward for further improvements for better impact.

Source: Ethiopian News Agency

The implementation of social protection programs in Ethiopia plays vital role to sustaining peace and stability as well as consolidating national unity in the country, World Bank Country Director in Ethiopia, Ousmane Dione said.

The Country Director made the remark today during the opening of the two-day high-level national social protection conference organized in Addis Ababa under the theme “Social Protection for National Building in Ethiopia.”

Speaking at the conference, Dione said that the role of social protection in building resilience and social cohesion is of significance for Ethiopia.

According to him, social protection can contribute to sustaining peace and stability and consolidating national unity, which is utmost important for Ethiopia to stand with the task we have for post conflict rehabilitation and reconstruction ahead of us.

Noting social protection should be a priority for nation building he said, adding as it establishes a direct connection between individual and governments to enhancing social contracts.

Moreover, he elaborated that social protection can contribute to peace-building in post conflict societies by strengthening social cohesion, defusing tension and grievances, and helping prevent social unrest and conflicts.

He described that studies that have examined the relationship between social transfer and civil unrest have shown how redistributive social protection transfer, represent an effective cost efficient method in reducing civil unrest and maintaining stability.

Social Protection is a vehicle to respond to additional vulnerabilities and poverty created by conflict, stressing conflicts have resulted in significant socio economic challenges to millions of Ethiopians.

“This means that the number of people that require Social Protection Services has gone up significantly in recent years, with some adaptation, existing social protection schemes have the potential to address conflict and risk vulnerability, food insecurity and loss of livelihoods,” he added.

Hence he said ”it is important to build back better by investing in adaptive and resilient social protection system first to fit post conflict setting.”

The government of Ethiopia has initiated and is implementing different flagship programs in collaboration with development partners, including the World Bank.

UNICEF Country Representative, Aboubacar Kampo on his part applauded the government of Ethiopia for its dedication to providing a social protection system to protect the poor and vulnerable.

Social protections through innovative approaches and partnerships, not only plays key role in addressing vulnerabilities, it also can empower communities and individuals to invest in local solutions, he stated.

The representative encouraged all to continue strengthening all elements of the social protection systems to enable job creation, productivity and overall growth and development.

He reaffirmed that UNICEF is committed to supporting the government to help boost communities economically and the nations at large.

The two day conference aims at enhancing awareness about the role of social protection in contributing to sustainable development, social cohesion and nation building.

Source: Ethiopian News Agency

The government of Ethiopia is committed to work closely with partners to ensure social protection system for vulnerable citizens in areas affected by conflict and drought, Deputy Prime Minister and Minister of Foreign Affairs, Demeke Mekonnen said.

A two-day high-level national social protection conference kicked off today under the theme “Social Protection for Nation Building in Ethiopia.”

The conference is organized by the Ministry of Women and Social Affairs in collaboration with the World Bank with the objective to expand and improve social protection programs in Ethiopia as well as enhance awareness about its role to ensuring sustainable development, social cohesion and nation building.

During the opening of the conference, Demeke said Ethiopia has faced many man-made and natural disasters that demand a sustainable effort to ensure the social protection of vulnerable citizens to such challenges.

Ethiopia has been implementing a social protection system for citizens, who are vulnerable to challenges including conflict and drought, Demeke indicated.

Moreover, he mentioned that the government has been intensifying efforts to protect the welfare and wellbeing of the citizens.

He said social protection is an anchor that binds the government and the people in addition to its role to addressing social and economic crises, stressing the need to invest on vulnerable citizens.

According to Demeke, despite the challenges we face as a country, efforts will continue to be strengthened to ensure sustainable development and increase community-wide benefits.

Demeke assured that government is committed to work closely with partners to ensure social protection system for vulnerable citizens in areas affected by conflict and drought.

AU Deputy Commissioner, Monique Nsanzabaganwa said on her part that Ethiopia adopted the African Union social agenda 2063 during the heads of state and government summit in January 2020 held here in Addis Ababa.

The agenda recognizes the essence of social development, inclusion and leaving no one behind to realize their aspirations, the goals and priorities of the African Union agenda 2063 towards transforming the current socio economic pathway over the continent.

The African Union’s social agenda 2063 is expected to assist member states of the African Union to develop policy instruments that will ensure introduction of human and social development for all citizens of Africa, she elaborated.

“We need partnerships and support in the implementation of this African Union social agenda 2063 as well as the ratification of the protocol for it to come into force,” she added.

The ratification of the protocol will ensure that the rights and welfare of all citizens are included in the development of Ethiopia as we march toward 2063.

World Bank Country Director in Ethiopia, Ousmane Dione said the government of Ethiopia has initiated and is implementing different flagship programs in collaboration with development partners, including the World Bank.

UNICEF Country Representative, Aboubacar Kampo has also applauded the government of Ethiopia for its dedication to providing a social protection system to protect the poor and vulnerable.

Source: Ethiopian News Agency

Japan will continue its humanitarian assistance and development cooperation with Ethiopia, according to Ambassador Ito Takako.

In an exclusive interview with ENA, Ambassador Takako said her country will extend assistance to the first batch of rehabilitation in the north to support the efforts being made by the government of Ethiopia.

“We are also waiting for information regarding the UN Basket Fund. Then we will be able to collaborate and contribute to the humanitarian assistance including for Borena, which is affected by drought,” she added.

According to Takako, financial contribution through the UN Basket Fund is one of the things that the Government of Japan will do to support the efforts of rehabilitation and reconstruction in the northern part of the country.

The ambassador further pointed out that the Government of Japan will have to think what it can do in terms of development, helping the people at the grass root level. “Those are the things we are also considering.”

She elaborated that the social sectors, including education and health, are also important areas that Japan is emphasizing in development cooperation with Ethiopia.

Source: Ethiopian News Agency

As we celebrate legacy achievements of our forefathers it is important to carry forward their vision and renew our commitment for stronger, more integrated and united Africa, Sate Minister of Foreign Affairs Ambassador Misganu Arga said.

Speaking at the African Day panel discussion organized by the African Leadership Excellence Academy (AFLEX), the ambassador said Africa needs to go a long way to achieve a truly united, prosperous and integrated Africa.

He added that our brave forefathers 60 years ago came together to realize the pan African vision with the establishment of the organization of African Unity-African Union (OAU-AU) with the aim of getting rid of colonialism, apartheid and defending the cardinal principle of sovereignty and self-determination.

He recalled that our visionary leaders including Emperor Hailesilasie, Julius Niyerere and many others recognized that Africa’s strength lies in its unity.

They committed themselves for the urgent need of a united Africa and worked with determination and courage to realize the continent they envisioned. We praise them for installing pan Africanism in our heart and giving us continental platform to defend our common interest.

However, as we celebrate their life and legacy achievements, it is important as well that we carry forward their vision and renew our commitment for stronger and more integrated and united Africa, he said.

“Our action needs to be guided by strong sense of urgency and strong desire to leave behind our dark history of violence, poverty, backwardness and deficit in democracy and human rights. We need to realize that we have to go a long way to achieve a truly united, prosperous and integrated Africa,” he said.

It is, therefore, important that we critically appraise the enormity and complexity of challenges our continent face, strengthen a more united fight against internal and external challenge. We also need to make sure that the values of pan Africanism are passed on to the next generation.

South Sudanese Ambassador to Ethiopia James Morgan said the formation of the OAU-AU organization is mainly to liberate the continent that was occupied and slaved and later on divided.

Today we are looking back to this day with a great pride of what our founding fathers have made. We look back with pride and confidence in ourselves because when we are occupied and in slave, that confidence was taken out of us.

But, our forefathers restored our dignity as people of this continent. The OAU did its task by liberating the continent, he added.

“We here in the Horn of Africa have a responsibility to bring the Horn of Africa together, one of it is to make sure that we have a freedom of movement of our people. We don’t want to be stuck in one place, our people in this continent must move freely,” he said.

The ambassador added that the next step is to integrate Africa which will be prosperous for all its citizens. Ethiopia has set an exemplary effort to the continent, he said adding that the country paid dearly to the struggle in most of this continent.

AFLEX Chief of Academy, Mehret Debebe on his part said in pursuit of Africa that we want, we are bound by a shared responsibility to push boundaries, dismantle barriers and pave the way for our future generation.

It is through unwavering determination; tenacity that we unleash Africa’s true potential.

“In this celebration of African day, I want to remind you, each one of you are as important to the other person next you, and African wants all of us. Let us use this occasion to lift Africa and connect our respective nations towards our role in the upcoming global change,” he said.

The African Union Commission (AUC) is celebrating the historical commemoration of the OAU-AU 60th anniversary under the slogan of “Our Africa Our Future”.

African ambassadors, academician, and other invited guests are attended the panel discussion.

Source: Ethiopian News Agency