Freetown, SIERRA LEONE – The Executive Board of the International Monetary Fund (IMF) announced on Tuesday, November 7, 2023, its approval of a proposal to increase its members’ quotas by 50 percent. This significant move is a part of the 16th General Review of Quotas (16th Review).
Pending approval by the Board of Governors, this decision promises a substantial boost in quotas for IMF members. The Board of Governors is set to vote on this proposal by December 15, 2023, with an 85 percent majority of the total voting power required for approval.
The proposal aligns with the guidance provided by the International Monetary and Financial Committee (IMFC) during the 2023 Annual Meetings, held in Marrakech, Morocco. The 16th Review of IMF quotas was a key topic at these meetings, where member countries committed to providing funds to the multilateral institution for lending to other members.
As of now, Sierra Leone’s quota with the IMF stands at Special Drawing Rights (SDR) 207.4 million. The country has been a member since September 10, 1962, and has participated in 19 arrangements during its membership.
The IMF asserts that this increase in quotas will contribute to safeguarding global financial stability by bolstering the IMF’s permanent resources and reducing its reliance on borrowed resources. The proposal also calls for efforts to develop potential approaches as a guide for further quota realignment by June 2025.
Notably, the last increase in quotas occurred in 2010, during the global financial crisis, when emerging markets played a vital role in the solution.
Following the Board’s decision, IMF Managing Director Kristalina Georgieva emphasized that concluding the 16th Review with a quota increase will help maintain a robust, quota-based, and adequately funded IMF at the heart of the Global Financial Safety Net. She stated, “An adequately resourced IMF is essential to safeguard global financial stability and respond to members’ potential needs in an uncertain and shock-prone world.” Georgieva expressed hope that the proposal would receive broad support from the membership and pave the way for a quota realignment under the 17th Review.
In an official statement, the IMF explained that the quota increase will enhance the IMF’s permanent resources and uphold the quota-based nature of the Fund by reducing reliance on borrowing, thereby ensuring the primary role of quotas in Fund resources. The proposal also envisions that, once the quota increases take effect, borrowed resources, such as Bilateral Borrowing Agreements and New Arrangements to Borrow (NAB), will be reduced to maintain the Fund’s current lending capacity.
Additionally, the IMF membership recognizes the urgency and significance of quota share realignment to better reflect members’ relative positions in the world economy while safeguarding the quota shares of the poorest members. Many members have expressed their support for both a quota realignment and the proposed quota increase. ZIJ/8/11/2023