April 30, 2024

World Bank President Ajay Banga said he expects donor countries to meet a request by African leaders to make record contributions to a low-interest facility for developing nations, saying these were not handouts but investments in the future.

African heads of state called on Monday for rich nations to help raise at least $120 billion for the International Development Association (IDA) at a conference to be held in Japan in December.

That would be a record for IDA, which offers long-term loans to developing nations and operates on a three-year cycle. The last round of fund-raising in 2021 raised $93 billion.

The target amount of $120 billion means donors will have to put up about $30 billion since the World Bank can borrow $3 for every dollar raised.

“There is no doubt that all the donor countries have their own challenges and their own fiscal responsibilities. But I think they all value the effect of contributing to IDA,” Banga said in an interview on Monday.

African nations account for more than half of the 75 that tap the IDA facility.

Many are grappling with heavy debt burdens and climate disasters but struggle to access affordable financing on international markets.

That makes access to IDA loans crucial, the African leaders said.

Banga said rich countries should recognise that giving generously is in their own interest, citing examples of once-poor countries like China and India that have graduated from IDA recipients to become major economies.

“I think the most important message is actually that this is not a handout,” he said. “If Africa develops well, Africa has a lot to offer the world.”

REUTERS