African Heads of State canvass $ 120b for continent’s devt
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AFRICAN Heads of State at the International Development Association ( IDA) 21 summit in Nairobi have called for an ambitious replenishment of $ 120 billion to support the continent’s development.
The current IDA replenishment cycle comes at a time when African countries are grappling with numerous shocks, like the debt crisis, the severe impacts of climate change, effects of the COVID19 pandemic, geopolitical tensions and conflicts currently being experienced across the world.
Nineteen African leaders present at the summit made a call to IDA donor countries to increase their contribution later this year to finance the development of low income countries to enable them invest in strong human capital, extending energy and digital access, building resilience to climate and fragility, infrastructure, health and education.
In a communique read by the Chair of the African Union, Mohamed Ould Ghazouani, the Heads of State called for stable and predictable increases in concessional financing flows into the continent.
They called for an ambitious IDA 21 replenishment that matches Africa’s developmental aspiration as well as increased access to long term concessionary financing, while laying emphasis on stronger partnerships, effective and joint coordination for the realisation of the African economic and development agenda.
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 capital, with every dollar of donor financing enabling an additional $ 3.5 in capital market leverage to amplify development impacts.
President of the Republic of Kenya, William Ruto, said: “Last year, we brought to global attention that African nations paid interest rates up to five times higher than the typical World Bank IBRD rates. Our proposal and request entail a vision for Africa- driven socio- economic development, executed with transparency and inclusiveness, and our case is straightforward.”