The President of World Bank Group, David Malpass, has said that the bank plans to invest $150 billion in Africa within the next five years towards promoting development on the continent.
Malpass disclosed this on Tuesday at the Summit on Financing African Economies, held in Paris, France.
With about $200 billion invested in Africa over the decade by World Bank, Malpass re-affirmed the bank’s commitment to financing development in Africa, stating that an additional $150 billion will be invested in Africa within the next five years.
“Over the past decade, the World Bank Group has invested $200 billion in Africa, and over just the next five years, we intend to invest and mobilize another $150 billion to support the continent’s development.”
He further stated that the fund would be made available through grants and long-term, zero-interest-rate loans from the International Development Agency.
“A large portion of this will be through grants and long-term, zero-interest-rate loans from IDA, which continues to provide strong positive net flows to Africa.”
Malpass emphasised the essence of debt sustainability and transparency, which is fundamental in the disbursement of the additional $150 billion.
“Debt sustainability and transparency will also be vital in attracting new financing and investment. We supported the G20’s DSSI deferrals, although participation by major creditors has been only partial and continues to allow large profits to be withdrawn from Africa even during the crisis, with no prospect of the debt cancellations that many advocated today.
“We are strongly supporting the IMF (International Monetary Fund) and G20 in implementing the G20’s Common Framework for debt reduction. We encourage all creditors, especially private creditors, to make Chad’s debt treatment under the Common Framework a success in terms of debt reduction and durable sustainability. In this context, IDA expects to remain the largest provider of positive net flows in Chad over the next decade, strengthening Chad’s ability to sustain a moderate debt burden if that can be achieved. However, as in other African countries, Chad’s debt sustainability is being challenged by the very limited progress on their debt reduction and transparency.”
He added there is a need for large inflows of long-term resources in Africa so as to address the challenges created by the Covid-19 pandemic.
“Africa needs large inflows of long-term resources. In addition to IDA, another important part of our support to Africa will be mobilization of the private sector, either directly through IFC (International Finance Corporation) and MIGA (Multilateral Investment Guarantee Agency) mobilizations or indirectly through the mobilization of funding by IDA and IBRD (International Bank for Reconstruction and Development) on capital markets,” Malpass stated.
The President of the World Bank Group also said that he had discussed with the French President Emmanuel Macron on some initiatives that would help boost development in Africa.
Some of these initiatives include closing the infrastructure gap and improving access to low-carbon electricity, expanding alternative small-business finance, and supporting agribusiness activities, with a proposal of a 3-year pilot for a user-friendly blended finance facility.
The Summit on Financing African Economies was attended by 21 African heads of state and government and several heads of continental organisations such as the African Union and AFDB and international organisations, such as the European Union and IMF.