Africa’s marginalization in global financial architecture was once again laid bare as the President of the African Development Bank (AfDB), Dr Akinwumi Adesina, criticized the International Monetary Fund (IMF) for what he described as a glaringly unfair allocation of Special Drawing Rights (SDRs).

Speaking in Abuja on Sunday, Adesina revealed that Africa, home to over 1.4 billion people and some of the world’s most vulnerable economies, received only $33 billion of the $650 billion SDRs issued by the IMF in 2021.

That figure represents just 4.5 percent of the total allocation, a disbursement that Adesina argued failed to align with the continent’s urgent financial needs, especially as African countries continue to struggle with the economic aftershocks of the COVID-19 pandemic.

“Out of the $650 billion in SDRs issued globally, Africa received only $33 billion, just 4.5 percent,” Adesina said. “This is despite being the continent most in need and with the least resources to manage the economic fallout.”

A Broken System at the Heart of a Global Crisis

The SDR system, which was designed to supplement countries’ official reserves and improve global liquidity, effectively entrenched existing global inequalities. Allocations were based on IMF quotas, which heavily favored advanced economies. For Africa, the fallout has been severe. While the continent endured some of the deepest economic scarring from the pandemic, with many countries experiencing negative growth, inflationary pressures, rising debt burdens, and dwindling foreign reserves, they lacked the fiscal space to implement robust recovery plans.

African countries were left scrambling for loans with steep conditionalities, while wealthier nations parked unused SDRs in their reserves. By comparison, the United States received around $113 billion, far surpassing what was shared among all 54 African countries combined.

Adesina noted that this structural imbalance in global financing mechanisms, exposed sharply during COVID, calls for urgent reforms.

But rather than wait for the global financial order to fix itself, Adesina said Africa is already engineering a workaround. The AfDB, in partnership with the African Union, has developed a new framework with the Inter-American Development Bank (IDB) to rechannel unused SDRs from wealthier countries to multilateral development banks, where they can be more effectively deployed.

According to him, the IMF Board has already approved this innovative financing model.

“This is a game-changer,” he said. “Each dollar of SDR rechanneled can be leveraged four to eight times. That means a $50 billion reallocation could unlock up to $200 billion in new development financing—at no cost to taxpayers.”

If implemented at scale, the plan could become a lifeline for African economies currently facing a precarious mix of debt distress, capital flight, and currency devaluation. It could also provide funding for climate resilience projects, healthcare systems, and infrastructure upgrades that are often postponed due to a lack of concessional financing.

Raising $27 Billion for the Poorest Countries

Adesina also announced that the AfDB’s concessional arm, the African Development Fund (ADF), is currently raising an additional $27 billion from global capital markets. These funds, he said, will be channeled to 37 of the continent’s poorest countries—countries that rely on concessional loans to meet basic developmental goals.

This new funding drive comes amid the ADF’s 17th replenishment cycle. The AfDB president appealed to global donors not just to pledge more, but to demonstrate long-term commitment to African development.

“The world must realize that investing in Africa’s stability and prosperity is not charity—it is economic common sense,” Adesina said.

The announcement underscores a growing wave of African-led financial initiatives aimed at reducing dependency on Western donors. The AfDB has been particularly vocal in calling for reforms to the global financial system, including adjustments to the IMF quota system, debt restructuring for overburdened African nations, and greater representation in global financial decision-making bodies.

Adesina reiterated that Africa’s financial independence is achievable if international partners support innovative funding mechanisms and allow African institutions to lead implementation.

“With greater investment in health, innovation, and financing, Africa can protect its people, unlock its potential, and chart its own path to prosperity,” he said.

The EU-India free trade agreement (FTA) negotiations face several key hurdles; India protects its agricultural sector with high tariffs and subsidies, fearing EU competition could harm local farmers. The EU, meanwhile, pushes for market access but faces resistance due to India’s domestic sensitivities. India maintains high tariffs on goods like automobiles, wines, and dairy, which the EU wants reduced. India seeks greater access for its textiles and pharmaceuticals in the EU, but faces strict regulatory barriers.

India wants easier visa norms for its professionals in the EU, particularly in IT and services. The EU is cautious, citing immigration concerns and labor market impacts. The EU demands stronger patent protections, especially for pharmaceuticals, while India prioritizes affordable generics, creating tension over IPR standards. The EU’s push for environmental, labor, and human rights clauses, including its Carbon Border Adjustment Mechanism, clashes with India’s concerns about added costs and sovereignty.

The EU seeks access to India’s public procurement markets, but India restricts foreign participation to protect domestic industries. India’s ties with Russia and differing views on global issues complicate trust-building, slowing progress. Negotiations, ongoing since 2007, aim for a deal by late 2025, but these issues require significant compromise. Both sides see strategic value—India as a counterweight to China for the EU, and the EU as a key market for India—but bridging these gaps remains complex.

The EU and China are each other’s largest trading partners for goods, with bilateral trade reaching €739 billion in 2023. However, their relationship is complex, marked by significant imbalances and tensions, unlike the EU-India negotiations, which face different structural challenges. The EU runs a persistent trade deficit with China, reaching €292 billion in 2023, down from €396 billion in 2022. EU exports to China were €223.6 billion, while imports were €515.9 billion. This contrasts with EU-India trade, where deficits are smaller, and negotiations focus more on tariff reductions than such stark imbalances.

China accounts for 21% of EU imports but only 8% of exports, highlighting dependency on Chinese goods like telecommunications equipment and electrical machinery. The EU seeks reciprocity, as China’s market remains closed in key sectors like procurement and services. European firms face regulatory barriers, forced technology transfers, and weak intellectual property enforcement. This mirrors India’s protective stance on agriculture but differs in scale due to China’s global manufacturing dominance.

China’s push for self-sufficiency and import substitution limits EU opportunities, unlike India, where negotiations aim to open markets mutually. The EU imposed tariffs up to 35.3% on Chinese EVs in 2024, citing unfair subsidies. China retaliated with duties on EU dairy and brandy. Recent talks explore minimum pricing instead, showing pragmatic dialogue absent in stalled EU-India agricultural talks.

China dominates supply chains, refining 90% of critical raw materials, creating EU dependency. This contrasts with EU-India discussions, which focus less on tech and more on traditional sectors. The EU views China as a partner, competitor, and systemic rival since 2019, balancing cooperation with caution. Tensions over China’s Russia ties and human rights issues complicate trade, unlike EU-India talks, where geopolitics play a lesser role.

U.S. tariffs under Trump (up to 125% on Chinese goods) push China to seek closer EU ties, potentially flooding Europe with cheap goods. The EU is wary, unlike its proactive FTA push with India to counter China’s influence. Chinese FDI in the EU hit €185 billion in 2024, nearly matching EU investments in China. However, the stalled EU-China Comprehensive Agreement on Investment (CAI) since 2021 reflects distrust, unlike the EU-India focus on building a new FTA framework.

Despite a 1.6% trade rise in 2024 (€762 billion), EU exports to China dropped 4.5%, signaling vulnerabilities. China’s resilience contrasts with India’s slower integration into global trade. The EU’s tools—like foreign subsidy regulations and anti-dumping measures—target China’s distortions, a sharper approach than the negotiated tariff reductions sought with India.

EU-China trade dwarfs EU-India trade, with China as a systemic challenge due to its economic weight. India’s hurdles are more about domestic protections than global dominance. EU-China tensions center on high-tech and imbalances, while EU-India talks grapple with agriculture, labor mobility, and sustainability standards. The EU uses defensive measures (tariffs, probes) against China but seeks cooperative deal-making with India, reflecting different strategic priorities.

EU-China trade remains robust but strained by imbalances, subsidies, and geopolitics. Recent talks on EVs and trade diversion suggest pragmatic steps, driven by external pressures like U.S. tariffs. Unlike EU-India negotiations, which aim for long-term integration, EU-China dynamics hinge on managing rivalry while preserving economic ties. Both relationships underscore the EU’s challenge to balance openness with strategic autonomy in a multipolar world.

Knowledge has since emerged as the most powerful factor of production, and a man or a woman with knowledge is a FACTOR.  Industrial age business is about controlling Supply to shape prices. Manufacturers work to provide supply, but dominance actually comes through distribution. Dangote Group’s most important competitive weapon is that it controls more than 40% of all active trucks in Nigeria, in a nation where goods are mainly shipped via roads.

In the 19th century, railroads played a pivotal role in shaping the American economy, with intense competition and financial struggles characterizing the industry. However, this era also saw the rise of monopolies like Standard Oil, which revolutionized the oil industry through efficient production and transportation methods. In response to concerns about monopolistic practices, the Sherman Antitrust Act was introduced in 1890.

For Rockefeller’s Standard Oil, the real antitrust issue was not about crude oil. The problem was asymmetric unfair positioning on DISTRIBUTION via bulk discounts which other oil producers could not get. The government stepped in and broke the oil giant into pieces.

The implication is clear in industrial age business: winning in markets becomes managing and controlling distribution as most businesses are bounded and constrained by geography, creating advantages which are largely localized.

But today, the game has shifted from control of supply to control of DEMAND for online firms. And only companies with capabilities to control demand are going to win big. If you check, most of the greatest internet companies are simply controlling demand, and that means controlling how supplies reach users and consumers.

It comes down to aggregation: if the suppliers of local news are many, the challenge moves from the scarcity of the news to sorting out the supplier that adds value, since no person can technically visit all the individual websites before arriving at the most valuable one. Welcome Google which now becomes a gatekeeper, helping to make sense of the whole thing by guiding users to the right contents once they search. This is an evolution, shifting power from the old suppliers to a new set of entities which control access to demand

What does that tell us? Winning today begins by connecting with People (like social media followers) and nurturing Audience, not by just coding, especially if you have a limited budget as a small business owner. If you have the People and can influence, your chance of success goes up in online business. Watch some videos I made to explain.

Comment on Feed

Comment: Ndubuisi Ekekwe you’re describing with plain words the so-called platform economy. Thank you for bringing these concepts into the simplicity realm.

My Response: Actually, it is not entirely platform-economy. My focus here is how to use CONNECTING with people to build small online companies. If I do not write here on LinkedIn, Tekedia Mini-MBA will not be enrolling hundreds of people every 4 months. Tekedia may not be a platform, but Ndubuisi is connecting with people and influencing demand.  Sure, I pay a price for this since I may never get a LinkedIn checkmark as my posts have outside links, but I am happy for the growing revenue over checkmarks.

Business Model Wins Empires; Demand Wins Over Supply In Digital and why Microsoft is ChatGPT’s Best Feature