Monday, May 20, 2024

Polaris of Enlightenment

Monday, May 20, 2024

Polaris of Enlightenment

World Bank chief calls on “rich” countries to raise hundreds of billions for Africa

Published 4 May 2024
- By Editorial Staff
Ajay Banga says Africa can prosper in the future - if it gets help now.

World Bank chief Ajay Banga announces that he expects “rich” countries – mainly in the West – to help raise at least $120 billion for the Bank’s own IDA, which offers concessional and long-term loans to developing countries.

– If Africa develops well, it has much to offer the world.

– There is no doubt that all donor countries have their own challenges and fiscal responsibilities. But I think they all appreciate the impact of contributing to the IDA, Banga said in an interview this week.

Banga expects donor leaders to respond to a call from African leaders to make record contributions to programs that offer loans and credits at significantly lower interest rates than the market average, with the aim of promoting long-term development and growth. The contributions should not be seen as handouts but as investments in the future, he said.

African leaders on Monday called on “rich” countries to collectively raise at least $120 billion at a conference in Japan at the end of the year. That would be a new record for the IDA, which typically offers very long-term loans to African countries and will have disbursed $93 billion by 2021.

Points to vested interest

The target of $120 billion means that donors will have to come up with about $30 billion, since the World Bank itself is willing to lend $3 for every $1 raised.

African countries account for more than half of the 75 countries benefiting from IDA funds. Many of them are heavily indebted and face major problems of natural disasters and poverty – while new loans have proved difficult to obtain on the international market.

Banga argues that there is a vested interest for rich countries to provide large grants, pointing out that China and India used to be recipients of IDA support, but are now significant global economies.

– If Africa develops well, Africa has a lot to offer the world.

The World Bank Group is an association of five international organizations and the parent organization of the World Bank, which is also the collective name for the first two organizations, IBRD and IDA.

The five organizations are

The International Bank for Reconstruction and Development (IBRD)
International Development Association (IDA)
International Finance Corporation (IFC)
Multilateral Investment Guarantee Agency (MIGA)
International Centre for Settlement of Investment Disputes (ICSID)

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