May 21, 2024

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Kenya: President Ruto Calls for Increased Concessional Funding From World Bank

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Nairobi — President William Ruto has led African heads of State and government in calling for increased concessional funding from the World Bank’s International Development Association (IDA).

IDA supports low-income countries with grants and long-term low-interest loans for development.

President Ruto called for tripling of IDA’s financing capacity to $279 billion by 2030, while maintaining the essential concessional nature of its financing in accordance with the recommendations of the G20 Independent Expert Group.

He explained that this would not only be a relief for many African and other developing nations facing severe debt crises, but also make available the much-needed resources to unlock Africa’s vast resources.

He noted that financial strain, as a result ot high interest rates, hampers efforts to combat climate change, transition to a low-carbon economy, and adequately fund essential sectors like education, health, and social protection.

“Now more than ever, long-term concessional financing is vital,” he said.

“Our proposal and request entail a vision for Africa-driven socio-economic development, executed with transparency and inclusiveness, and our case is straightforward: Significant capital injection into IDA is crucial,” he added.

He made the remarks during the International Development Association (IDA21) for Africa Heads of State Summit at the Kenyatta International Convention Centre, Nairobi County, on Monday.

In attendance were Presidents Yoweri Kaguta Museveni (Uganda), Samia Suluhu (Tanzania), Evariste Ndayishimiye (Burundi), Nana Addo Dankwa Akufo-Addo (Ghana), Lazarus Chakwera (Malawi), Julius Maada Bio (Sierra Leone), Azali Assoumani (Comoros), Mohamed Ould Ghazouani (Mauritania), Faustin-Archange Touadéra (Central African Republic), Andry Rajoelina (Madagascar) and Hassan Sheikh Mohamud (Somalia).

Also present were Prime Ministers Abiy Ahmed Ali (Ethiopia), Amadou Oury Barh (Guinea), Nadir Larbaoui (Algeria) and the President of the World Bank Group Ajay Banga.

At the same time, the President acknowledged the impactful demand-driven programmes of IDA, coupled with concessional loans lasting 40 to 50 years, empowering borrowing nations to pursue sustainable, long-term development strategies.

“IDA stands out for its rapid and decisive action during crises, distinguishing itself from other funding sources,” he added.

President Ruto said access to affordable, long-term capital at scale will help unlock Africa’s green energy resources, providing power to all its citizens, including the 600 million currently without access, and significantly advance global decarbonization efforts.

“Our continent possesses 60% of the world’s prime solar resources, and our untapped renewable energy potential exceeds fifty times the projected global electricity demand by 2040. However, realising this requires a shift in investment strategies,” he said.

The President said Africa is keen on driving its industrialisation agenda using its abundant energy, mineral and human capital resources.

“Africa is poised to transform its agriculture, water security, and energy access, while creating job opportunities for over 4 million youths entering the job market monthly and expand our small and medium enterprises,” he added.

President Ruto urged African Heads of States and Governments to play their part by taking deliberate and robust actions to improve fiscal discipline, increase domestic revenue mobilisation, develop investor-friendly policies and enhance anti-corruption measures.

President Akufo-Addo emphasised that mobilising finance and investment is central to Africa’s development needs and achieving the 17 sustainable development goals.

The Ghanaian president said that Africa’s challenge is not a scarcity of financing, but rather overcoming a global economic system that has failed to allocate sufficient long-term resources to support Africa’s economic transformation.

“That is why boosting the resources of the IDA whose ability to generate concessional financing represents an effective way to respond to the obstacles African countries encounter in the present global system,” he said.

President Suluhu said IDA should concentrate on giving concessional loans to enhance Africa’s development financing.

Prime Minister Abiy said that increasing IDA’s financial capacity will significantly enhance Africa’s ability to address its complex challenges.

“While IDA’s existing support must be commended, the sheer scale of challenges many African countries face necessitates a renewed approach,” he said.

President Museveni said that affordable financing for the development of infrastructure such as railways, electricity, and investment in irrigation will go a long way in spurring rapid economic growth in Africa.

President Chakwera said Malawi welcomes the replenishment of the IDA as a vehicle for economic transformation.

President Mohamud said that a larger replenishment of IDA will help the Somali government achieve its national objectives of reducing poverty and creating opportunities in Somalia and Africa.

“IDA is a major lifeline that the country is relying on to enable its ambitious national transformation agenda in this hopeful post-debt relief period,” he said.

By Capital FM.

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