World Bank willing to commit up to $160bn within the next 15 months and up to $350bn by 2023 – Finance Minister

At the Development  Committee Plenary of the 2020 Virtual Spring Meetings of the World Bank Group and the International Monetary Fund (WBG/IMF) held recently,  Zainab Ahmed, Honourable Minister of Minister of Finance, Budget and National Planning, disclosed on behalf of Nigeria and the entire African countries, the bank’s willingness to commit up to $160 billion within the next 15 months, and up to $350 billion by 2023.

According to her, Africa supports the call for the mobilisation of $100 billion for the continent as an emergency response to the pandemic, with $44 billion of the amount earmarked for immediate debt relief.

Addressing the Meetings, she noted that African countries, while responding to the challenges of the impact of COVID-19 pandemic and the severe disruptions in the global economy, have been equally forced to contend with multiple external shocks such as falling commodity prices, decelerating remittance flows, capital outflows, trade disruptions and rapidly rising debt levels.

“It is in this regard that we appreciate the WBG for its timely response with $14billion meant to assist countries mitigate the initial impact of the pandemic on human population. We also welcome and commend the bank for its strong, and forward-looking commitment to support developing countries’ efforts to restart their economies,” she said.

Making reference to the private sector, the Honourable Minister said: “Given that the private sector will be critical in the revamping of our economies, we urge International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA) to be more countercyclical, ambitious and visible in Africa.”

Ahmed also noted that for most of Africa, the commitment to early rebound is clear, “but our constraints are more. The IMF in its recent World Economic Outlook projected that Sub-Saharan Africa’s gross domestic product (GDP) will contract by 1.6 percent in 2020. The call by African leaders for the international community to scale up urgent support to vulnerable in Sub-Saharan African countries to enable them cope with COVID-19 is not only timely but urgent.”

Apart from welcoming the agreement of the G20 on the debt service moratorium for poorer countries, the continent commended both President David Malpas and Ms. Kristalina Georgieva, for their call for immediate debt relief in order to create fiscal headroom for poor countries, and also urges all creditors including multilateral and bilateral creditors, Paris club and commercial creditors to participate in this important initiative.

Though some of the African countries are categorised as middle income, Ahmed also noted that they are equally exposed to very severe vulnerabilities and would certainly benefit from financial assistance to weather the storm and to grow.

The continent, therefore, encouraged the WBG to embrace inclusiveness in all its support, including debt relief initiatives, irrespective of classification, so that global growth can be more even to address the challenges of sustainable development goals (SDGs); provide immediate assistance in the area of liquidity through IFC’s support to the financial sector targeted at ensuring resilience for the SMEs; promote and maintain strong partnership and collaboration with all multilateral development banks (MDBs), regional institutions, the United Nations (UN) systems, including World Health Organisation (WHO) on COVID-19: and focus on further developing new tools to measure and track the complexities of disaster risk mainstreaming (DRM) commitments.

She also expressed appreciation to the executive board and management of the WBG and especially, the frontlines staff who have continued to work hard to sustain business continuity at this critical time. She said: “Together with most of these frontline staff, we are navigating pathways to mitigate the impact of the pandemic on our population and on our economies.”

Despite limited institutional capacity and financial resources, she further noted that fiscal and monetary authorities in Africa have responded in various ways to contain the immediate public health challenge of COVID–19. “In addition to social distancing and improving the state of infrastructure in our public health facilities, we are strengthening social safety net to ameliorate its impact on our most vulnerable population.”