AFRICA: AFRICAN leaders are urging wealthy nations to make unprecedented pledges to a low-interest World Bank initiative dedicated to supporting developing countries in their development efforts and addressing climate change.
Donors will make their cash pledges to the International Development Association (IDA), a World Bank institution that offers loans with low interest rates and long tenures, at a conference to be held in Japan in December.
“We call on our partners to meet us at this historic moment of solidarity and respond effectively by increasing their IDA contributions… to at least 120 billion US dollars,” Kenya’s President William Ruto told a meeting of African leaders and the World Bank to discuss IDA funding.
African economies were facing a “deepening development and debt crisis that threatens our economic stability, and urgent climate emergencies that demand immediate and collective action for our planet’s survival,” Mr Ruto added.
He cited Kenya’s own devastating floods and a severe drought affecting Southern African nations such as Malawi. In attendance were Presidents Yoweri Kaguta Museveni (Uganda), Samia Suluhu (Tanzania), Evariste Ndayishimiye (Burundi), Nana Addo Dankwa Akufo-Addo (Ghana), Lazarus Chakwera (Malawi), Julius Maada Bio (Sierra Leone), Azali Assoumani (Comoros), Mohamed Ould Ghazouani (Mauritania), Faustin-Archange Touadéra (Central African Republic), Andry Rajoelina (Madagascar) and Hassan Sheikh Mohamud (Somalia).
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Also present were Prime Ministers Abiy Ahmed Ali (Ethiopia), Amadou Oury Barh (Guinea), Nadir Larbaoui (Algeria) and the President of the World Bank Group Ajay Banga. President Akufo-Addo emphasised that mobilising finance and investment is central to Africa’s development needs and achieving the 17 sustainable development goals.
The Ghanaian president said that Africa’s challenge is not a scarcity of financing, but rather overcoming a global economic system that has failed to allocate sufficient long-term resources to support Africa’s economic transformation.
“That is why boosting the resources of the IDA whose ability to generate concessional financing represents an effective way to respond to the obstacles African countries encounter in the present global system,” he said.
Prime Minister Abiy said that increasing IDA’s financial capacity will significantly enhance Africa’s ability to address its complex challenges. “While IDA’s existing support must be commended, the sheer scale of challenges many African countries face necessitates a renewed approach,” he said.
President Museveni said that affordable financing for the development of infrastructure such as railways, electricity, and investment in irrigation will go a long way in spurring rapid economic growth in Africa. President Chakwera said Malawi welcomes the replenishment of the IDA as a vehicle for economic transformation.
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President Mohamud said that a larger replenishment of IDA will help the Somali government achieve its national objectives of reducing poverty and creating opportunities in Somalia and Africa.
“IDA is a major lifeline that the country is relying on to enable its ambitious national transformation agenda in this hopeful post-debt relief period,” he said.
If donors pledge the minimum amount suggested by African leaders, it will surpass the previous fundraising round in 2021, which raised 93 billion US dollars. IDA lending operates on a three-year cycle, typically beginning with donors making their contributions at a global meeting.
The World Bank stated that IDA offers low-interest rate loans to 75 developing nations worldwide, with over half of them located in Africa.
The funding is used by governments to improve access to energy and healthcare, invest in farming, and build critical infrastructure such as roads. Ajay Banga, the president of the World Bank, promised to cut down “burdensome” rules that govern lending to nations under the IDA, to make it more efficient and to deliver funds to borrower nations faster.
“We believe a simpler and reimagined IDA can be deployed with more focus to make meaningful impact,” he said.
