Pledge of $160bn for sub-Saharan Africa region
THE WORLD Bank Group has committed $160 billion (R3 trillion) up to June next year to help developing countries, mostly in sub-Saharan Africa, in response to the coronavirus pandemic.
World Bank Group president David Malpass on Friday said the bank was supporting more than 100 countries in several ways to deal with the impact of Covid-19, with the healthcare crisis being of primary concern.
“In response to Covid-19, the World Bank Group has focused on taking fast, broad-based action (that) has resulted in new, health emergency programmes in more than 100 countries by the end of April, many of those are in sub-Saharan Africa,” Malpaas said.
“The World Bank Group will work to deploy as much as $160bn over the next 15 months. It is tailored to the nature of the health, economic and social shocks that countries are facing.”
Malpass said other development finance institutions, including the Asian Development Bank and the American Development Bank, as a group had committed about $80bn over the same period, bringing the total amount to $240bn.
“We are expecting a major global recession,” he said. Our estimates suggest a much deeper downturn than the Great Recession and we are responding forcefully and massively, especially for the poorest countries, involving significant increases in highly concessional financing and grants.”
These decisions were taken at the World Bank Group/International Monetary Fund (IMF) 2020 Virtual Spring Meetings. The IMF’s World Economic Outlook projections show that sub-Saharan Africa economies will be severely impacted by Covid-19, registering the sharpest contraction in economic activity in two decades.
During the International Monetary and Finance Committee meeting last week, Minister Tito Mboweni made a request for African countries to be assisted to meet their financial requirements.
Mboweni said African governments were concerned about the weak health systems, elevated debt vulnerabilities, diminished policy space and inadequate social safety nets, that made the region vulnerable to the pandemic.
“In excess of $100bn is required to enable sub-Saharan Africa countries to respond sufficiently to combating the pandemic, including additional resources of around $40bn based on the kinetics of the pandemic,” he said.
The IMF has already provided debt relief and freed up resources for more than 20 vulnerable low-income countries to respond effectively to the Great Lockdown through its Catastrophe Containment and Relief Trust.
The IMF and the World Bank have also made a call for a time-bound moratorium on debt service obligations, including to official bilateral creditors.
Mboweni also said the South African government was talking to all international financial institutions to meet the country’s funding needs.
“The National Treasury is exploring all funding avenues to fund all Covid19 related programmes,” Mboweni said.
“The funding avenues will not be limited locally, but will include exploring all global partners and international financial institutions. Funding agreements will be announced once concluded.”