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World Bank considers $150bn development fund for Africa

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World Bank has disclosed its plan to invest $150 billion in Africa within the next five years towards promoting development on the continent.

The President of World Bank Group, David Malpass, disclosed this on Tuesday, May 19, at the Summit on Financing African Economies, held in Paris, France.

Malpass reinforced the bank’s commitment to financing development in Africa, stating that an additional $150 billion will be invested in Africa within the next five years.

According to him, “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.”

He added that the fund would be made available through grants and long-term, zero-interest-rate loans from the International Development Agency.

He said: “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.”

Malpass maintained that the essence of debt sustainability and transparency, which is fundamental in the disbursement of the additional $150 billion.

According to him, “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deferrals, although participation by major creditors has been only partial and continues to allow large profits to be withdrawn from Africa even during the crisis, with no prospect of the debt cancellations that many advocated today.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 (International Monetary Fund) 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.”

Malpass stressed that there is a need for large inflows of long-term resources in Africa so as to address the challenges created by the Covid-19 pandemic.

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He added: “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 (International Finance Corporation) and MIGA (Multilateral Investment Guarantee Agency) mobilizations or indirectly through the mobilization of funding by IDA and IBRD (International Bank for Reconstruction and Development) on capital markets.”

Malpass noted that he had discussed with the French President Emmanuel Macron on some initiatives that would help boost development in Africa.

 

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  1. Pingback: World Bank Considers $150bn Development Fund For Africa | Techvalley

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