Under-Secretary-General Calls for Reshaping of Bretton Wood Institutions to Accommodate Africa

Addis Ababa April 23/2022 /ENA/ United Nations Under-Secretary-General and Executive Secretary of the Economic Commission for Africa, Vera Songwe, has called for reshaping of Bretton Wood Institutions to accommodate African voices in shaping world finance.

In a letter issued today, Songwe expressed her support for the ideas of Janet Yellen, US Treasury Secretary, and Rana Foroohar, an American business columnist and an associate editor at the Financial Times and CNN global economic analyst, about the need for a new Bretton Woods.

According to the Under-Secretary-General, the global financial system embedded in the Bretton Woods institutions - the IMF and World Bank - needs to be reshaped as the course of the global economy is being reshaped.

‘‘Yellen's words have fired a starter gun for change, but to win over the majority of this world requires more than words. It needs a road map,’’ she stressed.

Africa should have more voice on the boards of the financial groups and decision-making forums, and more velocity and volume in financial flows, Songwe stated.

Noting that Africa's economies are hit on all sides by the impacts of COVID 19, climate change, conflict, and their cruel foot soldiers: terrorists, locusts, droughts, floods, and tragically now even famines. she said "we are resilient. But that resilience also needs investment and reassurance." 

The Under-Secretary-General noted, "Specifically, in the short-term, Yellen must renew efforts to recycle the 100 billion USD in special drawing rights as promised, but also look at a new issue of SDRs; and place those SDRs in mechanisms that African finance ministers will actually use, and are asking for, to improve liquidity, stabilize currencies and reduce the costs of capital on sustainable infrastructure investments."

She also called on the US Treasury Secretary to lead efforts to force the World Bank's leadership to rise to these concurrent challenges and disburse faster and far more; not just persuade peers to stop cutting aid but increase that aid in the face of booming food insecurity, and extend debt service relief and dramatically deepen the G20's "common framework" on debt.

She further underscored that beyond these short-term moves, Yellen, backed by President Joe Biden, must rally all members of the G7 - as they remain the majority shareholders of the IMF and World Bank after all - to agree on a bold reform-plus-finance plan for key investments so we can hit our shared climate goals.