Egyptian President Mohamed Morsi with International Monetary Fund (IMF) managing director Christine Lagarde. Egypt is seeking a nearly $5 billion loan from the U.S.-based bank linked to ongoing neo-colonialism and underdevelopment within Africa., a photo by Pan-African News Wire File Photos on Flickr.
IMF adopts new quota system amid uncertainty
Sunday, 26 January 2014 19:17
By Chijioke Nelson
THE International Monetary Fund (IMF) has adopted a report by its Executive Board to the Board of Governors- the institution’s highest decision-making body, on the 2010 reforms and the commencement of its 15th general review of quotas.
The quota review and reform amendment was a move to ensure fair representation of all the member countries of the world body, especially the poor countries, including the assurance that as a quota-based institution, IMF has sufficient permanent resources to meet members’ needs and that its governance structure evolves in line with members’ changing positions in the world economy.
According to a statement from IMF, the Executive Board of the International Monetary Fund (IMF) had in 2010 approved proposals that will lead to a major overhaul of the Fund’s quotas and governance, strengthening the Fund’s legitimacy and effectiveness.
The Executive Board, which oversees the Fund’s day-to-day operations, recommended the reform package to the Board of Governors, which represents all 187 members, which must approve the proposed quota increases and amendment of the Articles of Agreement that would eliminate the category of appointed Executive Directors.
Analysts described the development as the most fundamental governance overhaul in the Fund’s 65-year history and the biggest ever shift of influence in favour of emerging market and developing countries to recognize their growing role in the global economy.
But in December 2010, during the 14th general review of quotas and approving of the proposed amendment of the executive board, the Board of Governors requested the that the timetable for completion of the 15th general review of quotas be moved to January 2014.
However, the board reform amendment is yet to enter into force as of mid-January 2014, though 141 members (requirement: 113) representing 76.1 percent of quota (requirement: 85 percent) have agreed to the board reform amendment.
Also, the initiation of the work on the 15th review has been put on hold to facilitate the achievement of the required acceptance threshold for the entry into force The conglomerates industry followed with a turnover of 154.106 million shares worth N776.861 million in 1,696 deals.
Of the reform amendment, which is one of the general conditions for effectiveness of the quota increases under the 14th general review of quotas.
In its report, the Executive Board deeply regrets the delay in implementing the Fourteenth Review quota increases and the Board Reform Amendment, which has hampered its ability to complete its work in connection with the 15th review by the January 2014 deadline.
Presently, given the delay, the Executive Board has concluded that “additional time” will be needed to complete its work on the 15th review.
It however, reiterates the importance and urgency of the 2010 reforms for strengthening the Fund’s effectiveness and legitimacy.
According to the board, the deadline for the completion of the 15th review will be moved from January 2014 to January 2015, even as it recognizes that the immediate priority is the effectiveness of the 14th review and reform amendment.
It also proposes that the institution’s highest decision body adopt a resolution expressing its deep regret that the 14th review and reform amendment have not become effective and urge the remaining members who have not yet accepted the 14th quota increases and reform amendment to do so without delay.