WASHINGTON, October 9, 2010 - African Finance Ministers called Saturday for a robust replenishment of the International Development Association (IDA), the World Bank’s fund which provides interest-free funding (known as credits) and grants to the world’s 79 poorest countries, 39 of them in Africa.
“I do hope larger players will realize the need not just to replenish funding for IDA, but to increase it,” said Kenya’s Deputy Prime Minister and Minister of Finance, Uhuru Kenyatta.
Contributions by 45 donor countries accounted for 60 percent of the current IDA (known as IDA-15) envelope, which holds US$41.6 billion.
Speaking at a press conference on behalf of African delegations to this year’s Annual Meetings of the World Bank and International Monetary Fund (IMF), Mr. Kenyatta and finance ministers from the Central African Republic (CAR), Comoros and Sierra Leone, echoed each other.
“The challenge now is to get together and convince the advanced countries to put more money into IDA as that is our window of opportunity,” said Samura Kamara, minister of finance for Sierra Leone, who is also chair of the African Caucus of Governors of the World Bank and IMF.
The leading source of development assistance to Africa
Out of a total US$11.5 billion provided by the World Bank to Africa during the fiscal year which ended June 30, IDA— the leading source of development funding for the region—accounted for US$7.2 billion, including US$1.5 billion in grants.
Donors gather every three years under a process known as replenishment to contribute to IDA. The fund, which turned 50 on September 24, 2010, has, since its creation, provided over US$220 billion (equivalent to about US$350 billion in today’s dollars).
The ministers said an increase in IDA funding would help strengthen the economic recovery Africa is experiencing following a global economic crisis it did not cause. While Africa may still account for only a small percentage of global growth, it has the potential to be a larger player, Mr. Kenyatta said. He added that there is a growing recognition that the continent can be part of the solution to the global recession, especially if adequate funding was provided to help it sustain its quick rebound.
Debt relief critical for economic growth and stability
While reiterating the appeal for IDA, CAR’s Finance Minister Albert Besse, and his counterpart from Comoros, Mohamed Bacar Dossar, also spoke of the importance of debt relief for countries rebuilding after violent conflict or political upheaval. Debt relief, granted in 2007 in the case of CAR, and the prospects for debt cancellation for Comoros in 2012, would afford both countries the fiscal space the ministers said Africa needs to fund economic stimulus programs, sustain macroeconomic stability, and tackle new challenges such as climate change and global vulnerability.
The ministers also had words of praise for the World Bank Africa Region’s initiative to consult with Africans as it embarks on the process of renewing its strategy for the region, the Africa Action Plan.