The World Bank on Wednesday announced a 93 billion dollars replenishment package of the International Development Association (IDA) to help low-income countries respond to the COVID-19 crisis and build a greener, more resilient and inclusive future.
This is according to a statement issued by the bank on Wednesday in Washington, adding that Africa would receive over 70 per cent of the funds.
It said that the financing brings together 23.5 billion dollars of contributions from 48 high- and middle-income countries with financing raised in the capital markets, repayments, and the World Bank’s own contributions.
“The financing package, agreed over a two-day meeting hosted virtually by Japan, is the largest ever mobilized in IDA’s 61-year history.”
“IDA’s unique leveraging model enables it to achieve greater value from donor resources, every one dollar that donors contribute to IDA is now leveraged into almost four dollars of financial support for the poorest countries.”
The bank said that the funds would be delivered to the world’s 74 poorest countries under the 20th replenishment (IDA20) programme, which focuses on helping countries recover from the impacts of the COVID-19 crisis.
“In these countries, the ongoing pandemic is worsening poverty, undermining growth and jeopardising the prospects of a resilient and inclusive development.”
“Countries are struggling with falling government revenues; increasing debt vulnerabilities; rising risks to fragility, conflict and instability; and dropping literacy rates. About a third of IDA countries are facing a looming food crisis,” it added.
It also said that IDA would deepen support to countries to better prepare for future crises, including pandemics, financial shocks and natural hazards.
“While IDA20 will support countries globally, resources are increasingly benefiting Africa, which will receive about 70 per cent of the funding.”
“With this strong package, IDA will be able to scale up its support in the pandemic and address health challenges, helping 400 million people receive essential health and nutrition resources.
“The social safety nets programme is also expected to reach as many as 375 million people.”
According to the bank, to help countries build back greener, a substantial portion of the funds will go to tackling climate change, with a focus on helping countries to adapt to rising climate impacts and preserve biodiversity.
The bank said that the IDA20 programme had more ambitious policy commitments that would support countries in prioritising investments in human capital.
These investment will cover issues such as education, health and nutrition, vaccines, safety nets and support for people with disabilities.
It added that IDA would also increase its ambition in addressing other major development challenges such as gender inequality, job creation, and situations of fragility, conflict and violence, including in the Sahel, the Lake Chad region, and the Horn of Africa.
A continued emphasis on governance and institutions, debt sustainability, and digital infrastructure interventions would help foster economic and social inclusion, it said.
The bank, however, said that due to the urgent development needs of IDA countries, the replenishment was advanced by one year.
This means that IDA20 will cover the period of July 1, 2022, to June 30, 2025, with the IDA20 policy architecture building on the strong foundation of IDA19, with enhancements to make IDA20 even more ambitious and fit for present day challenges.
World Bank Group President, Mr David Malpass, said that the generous commitment by its partners was a critical step toward supporting poor countries in their efforts to recover from the COVID-19 crisis.
“We are grateful for the confidence our partners have in IDA as a non-fragmented and efficient platform to tackle development challenges and improve the lives of millions of people around the world.”
Our correspondent reports that the IDA, established in 1960, helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programmes that boost economic growth, reduce poverty, and improve poor people’s lives.