Days of World Bank dictating to nations ‘are over’
THE days of debt crises and the World Bank telling African nations what to do are over, according to the lender’s president.
“One of the things we will never go back to is the bad old days where countries were in debt crises,” World Bank Group president Jim Yong Kim said in Tanzania’s commercial capital, Dar es Salaam, yesterday.
“We will never go back to when the World Bank and other organisations told countries what to do.”
The Washington-based lender last week announced $57 billion (R714bn) in financing for sub-Saharan African countries over the next three years.
Bank commits $57bn to development projects in sub-Saharan Africa the livelihoods of communities He said the funds will projects, support water sources for up to in the world’s second cover health, education, and refugees and their host communities, 45 million, and 5 gigawatts of largest continent. infrastructure projects such as and help countries additional generation capacity
Kim, who is currently on a expanding water distribution in the aftermath of crises. for renewable energy. trip to Rwanda and Tanzania and access to power. “This represents an unprecedented The scaled-up IDA financing to emphasise the World Bank’s Kim indicated that while opportunity will build on a portfolio of support for the entire region, much of the estimated $45bn to change the development 448 ongoing projects in Africa including Kenya, said the bulk in IDA financing will be dedicated trajectory of the countries in totalling to about $50bn. Of of the financing ($45bn) will to country-specific programmes, the region,” Kim added. Expected this, a $1.6bn financing package come from the International significant amounts IDA outcomes include is being developed to Development Association will be available through essential health and nutrition tackle the imminent famine (IDA), the lender’ special fund special “windows” to finance services for up to 400 million threat in parts of sub-Saharan for the poorest nations. regional initiatives and transformative people, access to improved Africa. THE WORLD Bank has committed $57 billion (R722.10bn) to development projects in sub-Saharan Africa in the next three fiscal years, said a press release from the Bretton Woods Institution on Monday.
Jim Yong Kim, World Bank group president, said the funds will support implementation of projects that transform
A portion of $45bn will come from the International Development Association, the World Bank Group’s fund for the poorest countries.
The financing will include an estimated $8bn in private-sector investments from the International Finance Corporation, the lender’s private-sector arm.
Delegates at last week’s G20 meeting in Germany discussed the need to rethink development finance, Kim said.
Developing government institutions benefit more from foreign direct investment than from aid, he said.
Nobody wants to go back to the days where the “debt ratio was so high that countries were paying much more in debt repayments than they were receiving”, Kim said.
The World Bank is trying to find win-win situations “so that countries will take out less sovereign-guaranteed debt”, he said.
Eritrea’s debt to gross domestic product ratio of 126 percent was the highest in sub-Saharan Africa last year, according to International Monetary Fund estimates. For Mozambique, where $1.4bn of hidden loans were discovered last year, the ratio was 113 percent.
Kim was in Tanzania to meet President John Magufuli and commission the start of a World Bank-financed interchange in Dar es Salaam, one of three infrastructure projects the lender is helping fund in the East African nation.