World Bank assures African countries of cheaper, long-term loans

The World Bank on Monday said it would provide concessional loans to African nations and work with governments to enable the continent’s sustainable development.

Ajay Banga, president of the World Bank Group, said the institution’s International Development Association (IDA) would provide Africa with funding for climate change mitigation, green development, and poverty reduction initiatives.

“We must seize the opportunity and unlock the potential of Africa. Africa can and must charge towards a better future,” he said during the IDA21 Replenishment African Heads of State Summit in Nairobi, the capital of Kenya.

Banga said there are many success stories in countries that have embraced IDA funding and transitioned their economies.

He identified China as one of the best examples, which transitioned from an IDA borrower to an IDA lender as it lifted millions out of poverty.

“In the success stories, governments played a key role in providing an enabling environment for growth.

“Each recognised challenges and implemented many policies to reduce trade barriers,” Banga said, adding that 36 countries have successfully graduated from the IDA.

He observed that Africa faces many headwinds, including debt, poverty, and climate change, which eclipse its numerous resources and stifle progress.

“We all must partner to progress, with governments leading in the development agenda and the IDA as a partner,” he said.

Kenyan President William Ruto, at the meeting, called for increased funding for the IDA, noting it should rise from 93 billion U.S. dollars in 2022 to 120 billion dollars in 2024.

He called for the issuance by the IDA of loans that have up to 50 years of repayment period.

Ruto said Africa’s escalating debt burden, compounded by global challenges, needs to be addressed through partnerships with institutions like the IDA.