The Oxford Global Think Tank has expressed support for the African Development Bank’s (AfDB) proposal to leverage International Monetary Fund (IMF) Special Drawing Rights (SDRs) as hybrid capital for multilateral development banks (MDBs), describing the initiative as a transformative model for financing Africa’s industrialization and infrastructure growth.
This is contained in a policy report titled Reforming African Minerals for Prosper Africa (RAMP Africa), recently launched in Abuja.
The think tank noted that Africa should take advantage of the newly approved IMF framework that allows member countries to channel their SDRs into MDBs as hybrid capital — an approach that multiplies the value of these reserves for development purposes.
According to the AfDB, every $1 of SDRs can unlock up to $4 in new development lending when strategically deployed through MDBs.
The Oxford Global Think Tank noted that African governments could maximise this opportunity by pooling their SDR allocations and routing them into specially designed AfDB and African Export-Import Bank (Afreximbank) hybrid instruments.
The organisation said “these African multilaterals can create mineral-linked cash flow accounts structured at the project level to mitigate currency and convertibility risks associated with infrastructure related to industrialisation.”
By adopting this financing model, the report argued, African governments can mobilise substantial resources for infrastructure development without incurring additional sovereign debt.
The AfDB has been at the forefront of advocating for innovative financial instruments to close Africa’s $100 billion annual infrastructure financing gap.
Its proposal to utilise SDRs as hybrid capital has already gained support from global partners, including the IMF and the G20, who view the mechanism as a viable way to unlock liquidity for emerging markets.
Backstory
In October, the Oxford Global Think Tank unveiled a major policy report titled Reforming African Minerals for Prosper Africa (RAMP Africa) at an event held in Abuja attended by Nairametrics.
The report, which is the culmination of extensive research and stakeholder consultations across Africa, seeks to reposition the continent’s vast mineral wealth as a springboard for industrialisation, sustainable development, and regional prosperity.
Speaking at the launch, the Deputy Speaker of the House of Representatives, Rt. Hon. Benjamin Kalu emphasised that massive investment in Africa’s mining sector is critical for unlocking its full economic potential.
According to him, Africa can no longer afford to export raw minerals without value addition, stressing that the time has come for the continent to rethink its approach to mineral resource management and beneficiation.
More insights
The RAMP Africa report identifies policy bottlenecks, governance gaps, and environmental challenges impeding the growth of the mining industry across Africa. It calls for integrated reforms that link mining to local manufacturing, renewable energy, and critical infrastructure.
The event brought together lawmakers, industry experts, investors, civil society leaders, and representatives from development institutions.
According to its website, the Oxford Global Think Tank (OGTT) is an independent, non-partisan, non-governmental organisation committed to fostering open dialogue and research.
