World Bank Group President, David Malpass, has disclosed that the bank plans to invest $150 billion in Africa within the next five years towards supporting growth in the region.
Malpass declared this on Tuesday at the Summit on Financing African Economies, which took place in Paris, France.
With about $200 billion invested in Africa over the decade by World Bank, Malpass reiterated the commitment of the bank to finance growth in Africa, expressing that an extra $150 billion will be invested in Africa within the next five years.
He said, “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.”
Malpass added that the fund would be made accessible through grants and long-term, zero-interest-rate loans from the International Development Agency.
He said, “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 gave emphasis to the principle of debt sustainability and transparency, which is vital in the disbursement of the extra $150 billion.
He said, “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deferrals, although participation by major creditors has been only partial and continue to allow large profits to be withdrawn from Africa even during the crisis, with no prospect of the debt cancellations that many advocated today.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.”
World Bank Group President further stated that there is a need for large inflows of long-term resources in Africa in order to tackle the difficulties created by the COVID-19 pandemic.
He said, “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 also declared that he had deliberated with the French President, Emmanuel Macron on some initiatives that would assist to improve growth in Africa.
Some of these initiatives include closing the infrastructure gap and enhancing access to low-carbon electricity, increasing alternative small-business finance, and backing agribusiness activities, with a proposal of a 3-year guide for a user-friendly combined finance capability.
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 global organisations, such as the European Union and International Monetary Fund.