Panel wants to rope in IMF gold to alleviate Africa's debt

The Africa Expert Panel, convened to produce a report on heavily indebted nations ahead of the G20 Leaders' Summit, has suggested a new instrument to refinance low-income countries' debt

- By Ed Stoddard

At the end of the rainbow lies a pot of gold that can be unlocked to aid the development of poor African nations saddled with crippling debt levels.

This is the view taken by the Africa Expert Panel that delivered its sweeping report on debt refinancing on Tuesday, 18 November - a key priority of South Africa's G20 presidency. And that pot of gold lies in the vaults of the International Monetary Fund (IMF).

“The G20 should work with the IMF and the World Bank to establish a debt refinancing scheme for these low-income and vulnerable countries,” the report says. “Funding for official participation in such a scheme could involve the use of SDRs [special drawing rights] or the sale of IMF gold, if supported by G20 shareholders.”

On receiving the report, President Cyril Ramaphosa remarked that it was “good to hear ... that there is a hoard of gold in the IMF”.

“This is the type of resource that can be made available to deal in ... financing the debt of many countries in the Global South,” he said.

The panel ... sees the capital generated by such sales being used on the development and climate change fronts — areas that are being deprived of resources

“Hoard” is not hyperbole: the IMF says it holds 90.5 million ounces of gold. In the wake of the precious metal’s blistering record run this year, its price is now more than $4,000 an ounce, which means the IMF's holdings are worth over $360-billion.