World Bank commits US$14.7billion to Africa

The World Bank Group committed a record US$14.7billion in fiscal year 2013 (July 2012 to June 2013) to support economic growth and better development prospects in Africa, despite uncertain economic conditions in the rest of the global economy.

The Group continued its strong commitment to Africa, approving US$8.25billion in new lending for nearly 100 projects during the year, a statement from the Washington-based lender said.

These commitments include a record US$8.2billion in zero-interest credits and grants from the International Development Association (IDA), the World Bank’s fund for the poorest countries. This is the highest level of new IDA commitments to any region in the Bank’s history.

“The region has shown remarkable resilience in the face of a global recession and continues to grow strongly. Africa is at the centre of the World Bank Group 2030 goals of ending extreme poverty and promoting shared prosperity -- in an environmentally, socially, and fiscally sustainable manner,” said Makhtar Diop, World Bank Vice President for the Africa Region.

IFC’s total commitment volume in sub-Saharan Africa, including mobilisation, grew to a record US$5.3billion, 34 percent more than the year before. Similarly, IFC’s spending on advisory services programmes in the region increased to more than US$65million. This led to increased results in fragile and conflict states, and greater impact in IFC’s primary areas of focus: sustainable farming opportunities, access to finance for microfinance clients and individuals, improved infrastructure services, and greenhouse gas emissions reductions.

Supporting developmentally-beneficial foreign direct investment into sub-Saharan Africa is a priority for the Bank’s political-risk insurance agency, the Multilateral Investment Guarantee Agency (MIGA).

In 2013, the Agency issued US$1.5billion in guarantees supporting investments into projects in the agribusiness, oil and gas, power, services, and water sectors. A significant volume of this coverage is for investments in power-generation projects in Angola, Côte d I’voire, and Kenya. Sub-Saharan Africa accounted for 54 percent of MIGA’s new volume this year -- more than doubling last year’s level of 24 percent.

The Bank Group’s support focused on major transformational projects in agriculture and power, and also on social safety-nets, conditional cash transfers for poor families, job-creation programmes for young people, and higher education.

Despite a difficult global economic environment, the commitments for IDA -- the World Bank’s fund for the poorest countries – were at an all-time high, and the Bank Group’s investments in private sector financing and political insurance guarantees also were at record highs.

IDA commitments reached a record US$16.3billion in 2013, up from US$14.7billion in 2012. The largest share of resources was committed to Africa, which received roughly 50 percent of total IDA lending, followed by South Asia at around 25 percent of the total.

“The Bank’s performance has been strong during my first year as President, and we are well-positioned to address the economic challenges developing countries face during these still uncertain times,” said World Bank Group President Jim Yong Kim.

The Bank recently raised its global growth forecast for 2013 to 5.1 percent for developing countries -- up from 5 percent in 2012 -- and noted that developing-country GDP is forecast to strengthen in coming years. Risks from advanced economies have declined and growth prospects are increasing, despite ongoing contraction in the euro-zone.

“At the Spring Meetings, our shareholders endorsed two new goals: ending extreme poverty by 2030 and boosting shared prosperity by fostering income growth for the bottom 40 percent of the population in every developing country. We are realigning all of the Bank’s efforts to achieve these goals.

"We are also modernising the Bank and developing a new strategy which will use these new goals to galvanise development efforts and deliver transformational development solutions to countries," Kim said.