By Kizito CUDJOE
Nineteen African Heads of State have convened at the IDA 21 summit in Nairobi, advocating for a robust International Development Association (IDA) replenishment of US$120 billion to boost the continent’s development.
The current IDA replenishment cycle comes at a critical juncture as African countries confront a myriad of shocks, including the debt crisis, severe impacts of climate change, repercussions of the Covid-19 pandemic, geopolitical tensions, and ongoing conflicts worldwide.
The leaders urged IDA donor countries to augment their contributions later this year, enabling low-income countries to invest in human capital, extend energy and digital access, build resilience to climate and fragility, and develop infrastructure, health, and education.
The Chairman of the African Union (AU), Mohamed OuldGhazouani, in a communique on behalf of the Heads of State called for stable and predictable increases in concessional financing flows into the continent.
They advocated for an ambitious IDA 21 replenishment that aligns with Africa’s developmental aspirations and emphasized the need for stronger partnerships and effective coordination to realize the African economic and development agenda.
Ahead of the summit, a group of non-state actors urged African leaders to demand an ambitious replenishment of the World Bank’s IDA fund.
In response, the World Bank launched the IDA coalition, comprising civil society, foundations, youth organizations, and the private sector, to champion a robust and ambitious replenishment of IDA’s resources.
Speaking at the summit, the President of Kenya, William Ruto,stressed the financial challenges faced by African nations, including high interest rates and increasing debt distress.
He said, “Last year, we brought to global attention that African nations pay interest rates up to five times higher than the typical World Bank IBRD rates. Developing countries are now net contributors to the global economy contrary to the expectations of receiving net inflows.
“The IMF reports that Sub-Saharan Africa’s ratio of interest payments to revenue has more than doubled in a decade, reaching nearly four times that of advanced economies by the end of 2022. As a result, over half of IDA recipients face debt distress or are at high risk. IDA remains their most dependable source of patient capital, with every dollar of donor financing enabling an additional US$3.5 in capital market leverage to amplify development impacts.”
Furthermore, he indicated that the proposal and request entail a vision for Africa-driven socio- economic development, executed with transparency and inclusiveness, and our case is straightforward.
He asserted that significant capital injection into IDA is crucialadding “The G20 Independent Expert Group recommends tripling IDA’s financing capacity to US$279 billion by 2030 while maintaining the essential concessional nature of its financing. At the very least, let us not ignore or wish away this expert advice.”
The President of the World Bank Group, Ajay Banga, reaffirmed IDA’s commitment to supporting Africa and expressed the organization’s efforts to make IDA more efficient and impactful.
Also, the Chief Executive Officer (CEO) of the ONE Campaign, Ndidi Okonkwo Nwuneli, called for transparency and accountability in IDA’s operations in Africa and urged IDA donors to increase their contributions by at least 25 percent.
On the part of the Chief Executive Officer (CEO) of Jacob’s Ladder, Sellah Bogonko, she emphasized the need for empowering Africa’s youth and adopting systems change approach to development.
Various other leaders and experts also shared their perspectives on the IDA replenishment, highlighting the importance of this initiative in addressing Africa’s pressing needs and transforming its economic landscape.
For instance, the Executive Vice President of the African Center for Economic Transformation (ACET), Mavis Owusu – Gyamfi, said “ACET’s African Transformation Index makes it clear that countries have fallen behind over the last twenty years. This has made it nearly impossible for Africa to withstand and quickly recover from crises.”
She noted that the African leaders’ commitment at the summit — that economic transformation must be at the heart of any and all investments in the continent — recognizes that transformation is essential for our long-term development.
“We stand ready to support our governments and all their partners, including the World Bank, to deliver on this ambitious but achievable agenda.”
The Senior advisor at Power Shift Africa, and member of the Independent Expert Group on Just Transition and Development, Fadhel Kaboub, also criticized the framing of IDA replenishment, advocating for historical polluters and former colonial powers to pay climate and colonial debts through grants, debt cancellation, and technology transfer to decolonize the Global South’s economic structures.
