African heads of state are pushing for an ambitious $120 billion in aid as the continent grapples with multiple challenges among which are low development and effects of climate changes.
The 19 leaders called for this support in Nairobi, Kenya, during a summit of African heads of state to discuss an International Development Association (IDA) replenishment on Monday.
Chaired by Mohamed Ould Ghazouani, the head of the African Union, the leaders argued that high levels of debt and high borrowing costs leave them unable to cope with extreme weather events caused by global warming.
Therefore, African countries are pushing for more concessional funding and pauses in repayment schedules when natural disasters strike.
William Ruto, Kenya’s president, said his country and the wider east Africa region faced “severe flooding that has devastated communities, destroyed infrastructure and disrupted our economies”.
Floods last month that killed more than 100 people and displaced in excess of 150,000 followed years of droughts in northern Kenya and the Horn of Africa.
As floods hit Kenya and Tanzania, countries in southern Africa, including Zambia and Zimbabwe, are battling droughts that are wrecking agricultural production.
Ruto called on wealthier nations “to meet us at this historic moment of solidarity” by increasing their IDA contribution from the $93bn in 2021 to $120bn in 2024.
The G20 independent expert group has recommended tripling IDA’s financing capacity to $279bn by the end of the decade.
Meanwhile, Ajay Banga, president of the World Bank has warned top economies of the world to support Africa given its burgeoning population and the climatic conditions rocking the boat of the region.
He told wealthy countries that it would be shortsighted to “ignore” Africa at a time when development budgets are being strained by wars in Ukraine and Gaza.
“Ignoring Africa is like ignoring the future of where the world’s going,” the World Bank president said.
Africa’s population is set to nearly double to 2.5 billion by 2050, when one in four people in the world will be African.
The former Mastercard executive said Africa’s youth was its most vital asset but at risk of being neglected, adding that “the purpose is to cater to this ‘demographic dividend”.
World Bank data has shown that one in three low-income countries eligible for its IDA, which offers grants and concessional loans, is worse off than it was on the eve of the pandemic four years ago, with most of those in Africa.
The IDA offers grants and concessional loans to 75 low-income nations, more than half of them in Africa, to boost development and, increasingly, to combat the effects of climate change.
Since 1960, it has provided $533bn, becoming a key source of donor funds that helped improve the economies of countries such as China and India.
Banga’s warning that Africa risked being squeezed of development funds was echoed by Abebe Selassie, the IMF’s Africa director, who said bilateral budget assistance from the EU, UK and other donors had been declining at an accelerating rate.
“In the past there used to be quite a lot of budget support to a lot of the poorest countries in the region, but this has been on a trend of decline,” Abebe said, adding that the World Bank and IMF had needed to step in to fill the gap.
“The most depressing thing is that even humanitarian support has been declining, he further said”
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
