WORLD BANK COMMITS $150 BN TO AFRICAN DEVELOPMENT

PUBLISHED: Wed, 19 May 2021 09:59:32 GMT
The World Bank
CNBC Africa
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Mr. President, 

I am very pleased to join you and everyone for today’s important discussion on financing African economies. Africa is full of investment opportunities that can attract private enterprises and investors from around the world. The World Bank Group is using all possible resources, financing tools, and dedicated staff across the continent to improve African lives and business prospects.

During the earlier session, I listened carefully to the challenges of vaccine access, inequality, and debt. I underscore the urgency in helping Africa overcome these crises. It’s clear that some countries will soon have vaccine supplies that vastly exceed demand, and I’ve repeatedly urged them to release the excess to countries that have delivery programs in place. We have Board-approved financing operations in many African countries to obtain safe doses and to administer them quickly and fairly as soon as the producer countries, COVAX, or manufacturers are ready.

Over the past decade, the World Bank Group has invested $200 billion in Africa, and over just the next five years, we intend to invest and mobilize another $150 billion to support the continent’s development. A large portion of this will be through grants and long-term, zero interest-rate loans from IDA, which continues to provide strong positive net flows to Africa. I want to thank you all for your strong support for the IDA20 replenishment.

Debt sustainability and transparency will also be vital in attracting new financing and investment. We supported the G20’s DSSI deferrals, although participation by major creditors has been only partial and continues to allow large profits to be withdrawn from Africa even during the crisis, with no prospect of the debt cancellations that many advocated today.

We are strongly supporting the IMF and G20 in implementing the G20’s Common Framework for debt reduction. We encourage all creditors, especially private creditors, to make Chad’s debt treatment under the Common Framework a success in terms of debt reduction and durable sustainability. In this context, IDA expects to remain the largest provider of positive net flows in Chad over the next decade, strengthening Chad’s ability to sustain a moderate debt burden if that can be achieved. However, as in other African countries, Chad’s debt sustainability is being challenged by the very limited progress on their debt reduction and transparency. 

As Axel discussed at yesterday’s Sudan summit, progress on debt there has been pivotal, along with the unification of the exchange rate, which proved to be immediately beneficial to the people of Sudan. We can now work together toward the HIPC Decision Point for Sudan in June.

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Africa needs large inflows of long-term resources. In addition to IDA, another important part of our support to Africa will be mobilization of the private sector, either directly through IFC and MIGA mobilizations or indirectly through the mobilization of funding by IDA and IBRD on capital markets.

IFC’s Managing Director and Executive Vice President, Makhtar Diop, will provide more details on our private sector mobilization efforts in a few moments, and I would like to highlight initiatives that President Macron and I discussed recently.

First, closing the infrastructure gap and improving access to low-carbon electricity. Second, IFC has doubled our trade finance. To continue this effort, we’re announcing that IFC and MIGA are about to launch a joint trade finance initiative in selected African countries. Third, we’re working to expand alternative small-business finance. And fourth, to support agribusiness activities, we’re proposing a 3-year pilot for a user-friendly blended finance facility.