David Malpass, the President of the World Bank Group, has stated that the bank intends to spend $150 billion in Africa over the next five years in order to promote growth on the continent.
Malpass made the announcement on Tuesday in Paris, France, at the Summit on Financing African Economies.
Malpass reaffirmed the World Bank’s commitment to funding growth in Africa, noting that an additional $150 billion will be spent in Africa over the next five years, with the bank having invested around $200 billion in Africa over the last decade.
“The World Bank Group has invested $200 billion in Africa over the last decade, and we plan to invest and mobilize another $150 billion in the next five years to support the continent’s development.”
He went on to say that the money would come from grants and long-term, zero-interest loans from the International Development Agency.
“IDA, which continues to provide strong positive net flows to Africa, will provide a large portion of this through grants and long-term, zero-interest loans.”
The importance of debt sustainability and accountability, according to Malpass, is critical in the disbursement of the additional $150 billion.
“Attracting new financing and investment will also require debt sustainability and transparency. We endorsed the G20’s DSSI deferrals, despite the fact that major creditors’ involvement was only partial, allowing huge profits to be extracted from Africa even during the crisis, with little possibility of the debt cancellations that many advocated today.
“We are fully committed to assisting the IMF and the G20 in implementing the G20’s Common Framework for Debt Reduction. All creditors, especially private creditors, are urged to make Chad’s debt treatment under the Common Framework a success in terms of debt reduction and long-term viability. In this context, IDA expects to continue to be Chad’s largest source of positive net flows over the next decade, bolstering the country’s ability to manage a moderate debt burden if that target can be met. Chad’s debt sustainability, like that of other African nations, is jeopardized by the country’s slow progress on debt reduction and transparency.”
He went on to say that massive infusions of long-term funding are required in Africa to resolve the challenges posed by the Covid-19 pandemic.
“Large inflows of long-term resources are required for Africa. Apart from IDA, another important part of our support to Africa will be the mobilization of the private sector, either directly through IFC and MIGA mobilizations or indirectly through IDA and IBRD (International Bank for Reconstruction and Development) capital market mobilizations,” Malpass stated.
The President of the World Bank Group also stated that he had discussed some initiatives with French President Emmanuel Macron that would aid Africa’s growth.
Closing the infrastructure gap and improving access to low-carbon energy are only a few of these projects, as are expanding alternative small-business financing and promoting agribusiness operations, with a 3-year pilot for a user-friendly blended finance facility proposed.
21 African heads of state and government, as well as many heads of continental and international organizations such as the African Union and the African Development Bank, attended the Summit on Financing African Economies.