Call for bids for Research on the Utilization of Special Drawing Rights (SDRs) allocated to Nigeria and Ghana
The Africa Network for Environment and economic Justice, ANEEJ, in partnership with the Africa Centre for Energy and Policy with support from Open Society Initiative for West Africa is seeking the services of two researchers to undertake an assessment of the Utilization of the Special Drawing Rights in Nigeria and Ghana
Project Background
Countries of the Economic Community of West African States (ECOWAS) are reeling under heavy debt burdens in the face of the global triple crisis of pandemic, economy and climate change.
The debt crisis in the Economic Community of West African States (ECOWAS) region has risen steadily in recent years. While IMF debt sustainability analysis as of February 2021 shows that the majority of countries in West Africa have remained in moderate debt distress, a further analysis indicates that debt accumulation prior to the outbreak of Covid-19 outpaces the ability of growth performance to support debt servicing.
The gap (percentage difference) between general gross government debt and debt service commitments (expressed as a percentage of GDP), significantly widened before the end of 2019. General gross government debt stood at 39.62 of GDP while debt service as percentage of GDP was at 1.03 percent in 2012. The situation deteriorated to 57.87 for general gross government debt and 1.87 percent for debt service in 2018. This is a clear indication that debt service compared to debt accumulation has been weak and potentially shows a reduced capacity of governments in the region to deal with their overall debt burdens without running into fiscal constraints.
Nigeria’s Debt Management Office puts the total Public Debt Stock at USD 95,779.64 billion at December 31, 2021. Ghana’s public debt stock shot up by ¢27.8 billion in April 2021 to ¢351.8 billion in December 2021, according to figures obtained from the Bank of Ghana. Sierra Leone’s debt is classified as being at high risk of debt distress, largely due to heightened solvency and liquidity risks arising from the COVID–19 pandemic.
As a direct response to the plight of addressing economic crisis unleashed by the pandemic, the International Monetary Fund (IMF) Board of Governors in August 2021 approved a new general allocation of $650bn Special Drawing Rights (SDR) to help boost the liquidity of member countries, but $420bn is allocated to advanced economies that in the real sense don’t need them. African countries are to receive about US$33.8 billion. Nigeria is allocated $3.35 billion as its share. Ghana on its part, received $1billion from allocation from SDR.
It is against this background that ANEEJ, Nigeria in partnership with ACF, Ghana seeks to commission two experts in both countries to undertake the research.