President Samia Suluhu Hassan addresses a meeting of African leaders and the World Bank that discussed International Development Association (IDA) funding in Nairobi on April 29, 2024. PHOTO | STATE HOUSE
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Nairobi. African leaders on Monday outlined priority areas where rich countries and development partners could focus on to stimulate growth on the continent.
The leaders, who gathered at the World Bank heads of state summit in Nairobi to discuss International Development Association (IDA) funding, unveiled their transformation agenda, aiming to improve lives and create new opportunities, with the World Bank’s IDA as a cornerstone for success.
President Samia Suluhu Hassan, who was one of the speakers at the event, urged the World Bank to focus on providing concessional loans to relieve the countries from debts.She appreciated the support of IDA in maternal and child health, rural electrification and the broader economic recovery in Tanzania, adding that the agency has potential to help its recipients to leverage resources from other partners.
President Hassan cited an example of the Msimbazi Basin Development Project in Dar es Salaam which benefited from the World Bank support worth $200 million.
“In a bid to consolidate and building on the success obtained, we are pleased to advance this most important dialogue. We are doing so at a time when Africa and the world are still facing the effects of multiple crises. In light of these crises, coupled with significant shortfalls in development finance and shrinking fiscal space, what is required going forward are more concessional resources,” she said.
“Moreover, considering the challenge related to present projected debt levels, we strongly believe that IDA should focus more on providing concessional loans such as 50-year credits. These facilities will provide more fiscal space for African countries to address competing development needs.”
President Hassan urged the World Bank to simplify policies and streamline operational processes in attempt to increase access to development finance, reduce cost of the finance and ensure achievement of the development projects objectives.
President William Ruto of Kenya called on “our partners to meet us at this historic moment of solidarity and respond effectively by increasing their IDA contributions...to at least $120 billion”.
African economies were facing a “deepening development and debt crisis that threatens our economic stability, and urgent climate emergencies that demand immediate and collective action for our planet’s survival,” he said.
Dr Ruto cited devastating floods in Kenya and a severe drought affecting Southern African nations such as Malawi.
Ugandan President Yoweri Museveni spent his time to explain the historical causes of underdevelopment of Africa and hint on the way forward.
“The reason why Africa is not growing is because the growth factors are not funded. They are not even understood,” Mr Museveni said, listing low cost of production as one of them.
He said low cost of production is mostly influenced by transportation such as railway.
“If you want to help Africa, fund the railway. You can now audit how much you spend for railways compared to the financing of capacity building which mostly end up in eating in hotels,” he said.
President Museveni mentioned other growth factors which need financing as cheap electricity, cheaper financing of the manufacturing sector, financing of irrigation schemes and linking more people to the financial chain.
Donors will make their cash pledges to the IDA - a World Bank institution that offers loans with low interest rates and long tenures, at a conference to be held in Japan in December.
Ethiopian Prime Minister Abiy Ahmed commended the IDA existing support but noted that most African countries still face challenges, calling for a renewed approach.
“With 120 million people, Ethiopia has great potential for prosperity. Yet, as a key recipient of IDA support in Africa, Ethiopia faces a significant financing shortfalls that may hinder the progress,” he said.
“We urge IDA to significantly enhance financial capacity and funding model. Specifically, support for crisis, preparedness, response and recovery is essential,” he added.
IDA offers low interest rates loans to 75 developing nations around the world, the World Bank said, with more than half of them in Africa.
The funding is used by governments to boost access to energy and healthcare, invest in farming and also build critical infrastructure such as roads.
The World Bank president Ajay Banga, promised to cut down “burdensome” rules that govern lending to nations under the IDA, to make it more efficient and to deliver funds to borrower nations faster.
“We believe a simpler and reimagined IDA can be deployed with more focus to make meaningful impact,” he said.
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