Paris Summit Spotlights Innovative Financing Solutions for Climate and Development Goals

African Development Bank head Dr Adesina ( third from left) on panel discussing SDRs and debt at the Summit For a New Global Financing Pact, Paris, June 22 2023

At the Summit for a New Global Financing Pact in Paris, Dr. Akinwumi Adesina, President of the African Development Bank, urged multilateral development banks (MDBs) to utilize International Monetary Fund (IMF) Special Drawing Rights (SDRs) for combating climate change and achieving the UN Sustainable Development Goals (SDGs). Adesina emphasized the MDBs’ potential to leverage $200 billion in SDRs into a staggering $1 trillion, spotlighting their critical role as financial multipliers.

The African and Inter-American Development Banks have led the push for reallocating IMF’s SDRs, with the African Development Bank focusing on enhancing financing for regional and national banks across Africa. This move aligns with the Finance in Common initiative, aimed at expediting the fulfillment of the 2030 UN SDGs.

IMF Managing Director Kristalina Georgieva announced the achievement of a $100 billion target in SDR lending, a significant milestone supporting vulnerable nations.

The summit, moderated by Spain’s First Deputy Prime Minister Nadia Calvino, featured diverse perspectives. Sri Lankan President Ranil Wickremesinghe highlighted the need for tailored financial architecture solutions, while Tunisian President Kais Saied called for a reform in the global financial system.

Chadian President Mahamad Idriss Deby emphasized the urgent need for debt relief and climate change reparations, citing Chad’s struggles with climate-induced displacement and refugee influxes.

With 21 African nations facing severe debt crises, Adesina stressed the urgency of an effective and speedy G-20 Common Framework for Debt Treatment. He called for a more coordinated approach to address the broader range of affected countries.

UN Secretary-General António Guterres, opening the summit, highlighted the dire need for debt relief mechanisms that offer sustainable borrowing options for developing nations, along with enhanced access to IMF’s SDRs.

The summit, attended by several African leaders and international organizations, reflects a growing consensus on innovative financial strategies to address global challenges in climate and development.

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