As their countries face a third wave of COVID-19 with tragic health, social, and economic impacts, more than a dozen African leaders will meet in Abidjan to articulate their plans for economic recovery, job creation, and investing in human capital. I look forward to joining them and will strongly reaffirm the World Bank Group’s commitment to Africa’s transformation.
Amid the pandemic, the focus of the World Bank’s International Development Association (IDA) has been two-fold. We are doubling down on urgent support to help Africa cope with the crisis, including by strengthening health systems and helping finance the acquisition and deployment of vaccines. At the same time, we are deepening our support for countries’ efforts as they plan for a strong, green, and inclusive recovery.
More than a year ago, when it became clear that the pandemic would have a huge impact on the world’s most vulnerable people, we moved swiftly to massively frontload the support that IDA provides on a three-year cycle to the world’s poorest countries. Thirty-nine of these 74 countries are in Africa.
Since April 2020, the scale-up of our support to the African continent has been unprecedented, reaching over $41 billion at the end of June. The bulk of this has been directed to the challenges imposed by COVID-19, with a focus on saving lives, protecting poor people, creating jobs, and rebuilding better from the crisis. This has included billions of dollars in support for health-related expenditures.
Recently, we have also entered a partnership with the African Union’s COVID-19 Vaccine Acquisition Task Team (AVATT) that aims to finance the purchase of vaccines for up to 400 million Africans. Progress has been swift: we expect the first doses to arrive within the next few weeks.
For Africa’s low-income countries, IDA has been the biggest source of financing. IDA provides either interest-free long-term loans or grants, with the latter increasing to over $10 billion over the past year. IDA’s support is helping countries cope with the impacts of the crisis as well as tackle ongoing challenges related to long-term development, fragility, and climate change.
This level of financial support is not temporary. It represents a structural shift in the Bank’s partnership with Africa, where our engagement has grown from 15 percent of the World Bank’s annual lending program 20 years ago to 45 percent today. Over the past five years, the World Bank committed $106 billion to Africa while increasing our staffing in African countries by over 40 percent.
The World Bank’s engagement is comprehensive and inclusive, with a commitment never to leave countries behind. Sudan is a case in point: we have recently helped Sudanese authorities end decades of financial isolation and partner again with the international community. This has let us launch a key poverty reduction program in the country and a comprehensive debt relief package that will eventually cut Sudan’s debt by over 90 percent. More broadly, we are finding ways to remain engaged in countries affected by fragility and conflict, in close coordination with our UN partners on the ground. Instead of withdrawing, we opted to stay with those countries and provide critically needed support, increasing by 50 percent over the past year, to almost $15 billion.
While IDA is focusing heavily on helping countries respond to the pandemic and other crises such as locusts, drought, and armed conflict, all of its support serves one ultimate objective: to promote long-term economic, social, and sustainable development. With countries’ needs continually evolving, we need insights and guidance from African leaders on how the World Bank can best support the long-term ambitions of countries across the continent.
We have moved up by one year our negotiations with donors for a new three-year replenishment of IDA. The ideas coming from African partners are significantly influencing this next cycle’s strategic directions, with more emphasis on several key areas: creating jobs, stimulating private sector development, narrowing the digital divide, expanding energy access, and stepping up regional integration.
The Abidjan Summit will be an opportunity to discuss the drivers of Africa’s recovery and longer-term development prospects. It will help set the directions of the IDA negotiations, as we expect about two-thirds of all IDA resources in the next cycle will be allocated to Africa.
The discussions will also give momentum in the ambition of the funds to be raised as the needs are very high and the consequences of lack of action could have a serious impact on the long-term prospects of the continent. The challenge is to act now, supporting Africa to build back better and improve people’s lives.
First published on Jeune Afrique, via World Bank