The Executive Board of the International Monetary Fund (IMF) has proposed a 50% quota increase allocated to members, including Ghana, in proportion to their current quotas.
This will be subject to the Board of Governors’ approval.
The proposal follows the guidance from the International Monetary and Financial Committee (IMFC) at the 2023 Annual Meetings.
According to the Fund, the quota increase would help safeguard global financial stability by enhancing the IMF’s permanent resources and reducing reliance on borrowed resources.
The proposal envisages that once quota increases are in effect, borrowed resources comprising the Bilateral Borrowing Agreements and New Arrangements to Borrow (NAB) would be reduced to maintain the Fund’s current lending capacity.
“Concluding the 16th Review with a quota increase will help preserve a strong, quota-based, and adequately resourced IMF at the center of the Global Financial Safety Net. An adequately resourced IMF is essential to safeguard global financial stability and respond to members’ potential needs in an uncertain and shock-prone world,” IMF Managing Director Kristalina Georgieva said after the Executive Board’s decision.
The membership has also acknowledged the urgency and importance of quota share realignment to better reflect members’ relative positions in the world economy while protecting the quota shares of the poorest members, and many members would have supported a quota realignment now, together with the proposed quota increase. Hence, another critical element of today’s proposal is a call on the Executive Board to work to develop, by June 2025, possible approaches as a guide for further quota realignment, including through a new quota formula, under the 17th General Review of Quotas.
“The proposed quota increase comes at a complex time for the global economy and the IMF’s membership. In the spirit of international cooperation, I am hopeful this proposal will garner the broadest possible support from the membership, and that we will then make progress on a quota realignment under the 17th Review,” said IMF Managing Director Kristalina Georgieva.
The proposal also includes a call for work to develop, by June 2025, possible approaches as a guide for further quota realignment.
“As the world grapples with rising fragmentation, today’s decision is a strong signal that the membership can still come together in support of cooperative solutions that instill confidence in the IMF’s ability to effectively support its membership in navigating a challenging global landscape,” she said.
The Executive Board has requested that the Board of Governors vote on this proposal by December 15, 2023.
Approval by the Board of Governors requires an 85% majority of the total voting power.
Source: Myjoyonline