(Bloomberg) -- The UK agreed to channel its rights to International Monetary Fund reserve assets through the African Development Bank to help raise funding for poorer countries, the head of the continent’s biggest multilateral lender said.

While the IMF last year allocated a record $650 billion of so-called Special Drawing Rights, or SDRs, to mitigate the impact of the coronavirus on the global economy, African nations received only $33 billion -- as much as France and Italy combined, and less than half of what the US received. That’s because allocations were based on predetermined quotas, which took factors such as the size of countries’ economies into account.

Budget constraints that pre-dated the virus and limited stimulus measures that African countries could provide to address the economic damage wrought by the pandemic mean the continent still faces a funding shortfall. 

“African heads of state have been clear that Africa needs at least $100 billion,” Akinwumi Adesina, president of the Abidjan, Ivory Coast-based bank, said in interview last week. The UK has already committed to channel a portion of its SDRs through the AfDB, which is also in talks with Canada and France about doing the same, he said.

Under the plan, wealthy nations would lend their SDRs to the AfDB, which could account for these assets as equity and leverage “every dollar of SDRs four times as a AAA-rated financial institution,” Adesina said. The credit rating of the AfDB, which has 54 African shareholders and 27 non-regional shareholders, including the US, Japan and France, allows it to raise funds on capital markets at lower costs than African sovereign issuers. 

The lender is also working with the IMF to address concerns of rich nations, including reserve-asset quality and the ease with which countries that channel part of their SDRs through the AfBD can get it back.

“I am positively optimistic somewhere down the line we will get there,” Adesina said.

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