Africa is Bank’s selling point as it seeks donor dollars for IDA
6 July 2007
Critics argue that the Bank and many of its borrowers are ill-equipped to effectively utilize the substantial increase in aid requested on Africa's behalf.
South Africa's Business Day reports that Obiageli Ezekwesili, the World Bank's new Vice President for Africa, is hoping for $56 billion from donors to replenish the coffers of the International Development Association (IDA), the Bank's lending window that provides loans on concessional terms to low-income countries. Speaking during the second round of IDA negotiations held in Maputo, Mozambique, the former education minister of Nigeria told donors that half of the money (around $28 billion) would be earmarked for Africa.
The World Bank, like other public lending institutions, relies in part on periodic replenishments of its lending facilities by member countries. Donor countries contribute new funds to IDA every three years. Negotiations for the 15th replenishment will take place throughout 2007 to secure donor funds for IDA operations over the period July 2008 through June 2011.
According to Business Day, Ezekwesili acknowledged that in order to obtain the requested contributions, which would represent a 70 percent increase over allocations to the previous IDA envelope, "the G-8 must come through on its promise" made in 2005 to scale up aid to Africa. "We need to see the checks written." However, in its official statement on IDA financing requirements, the World Bank says it is only seeking a 20% increase over the amount received during the previous replenishment.
Newly confirmed World Bank President Robert Zoellick has also emphasized Africa in his campaign to raise funds for IDA. During a recent tour of the continent, Zoellick reiterated the commitment of his predecessor, the ousted Paul Wolfowitz, to put Africa at the top of his agenda, and appealed to African leaders to help solicit IDA contributions.
Meanwhile, some critics argue that the Bank and many of its low-income borrowers are ill-equipped to effectively utilize such a substantial increase in aid. As the number and size of projects increase, they argue, the quality of loans suffers, leading to wasteful and ineffectual programs that could jeopardize any gains made during the latest round of debt relief.
The sheer volume of approvals for Africa during the 2007 fiscal year has posed a significant challenge to the Bank. Over the last three months, the Bank approved a spate of what some have described as hastily designed projects, in a last-ditch effort to meet its commitment to provide "$5 billion or higher" to the continent in 2007. This push raised concerns that the Bank cut corners in its review of social and environmental safeguards. If the Bank was hard pressed to get $5.7 billion out the door over the past year, there is reason to doubt that it could effectively manage over $9 billion annually, as envisaged by Ezekwesili in her request to IDA donors.
Resources
- World Bank executive hopes for more funds by Linda Esnor, Business Day, June 14, 2007 (Business Day website)
- The demand for IDA 15 resources and the strategy for their effective use, World Bank, June 2007 (World Bank website) (Acrobat PDF 392 KB)
- Zoellick puts Africa at top of agenda, by Christopher Swann and Janine Zacharia, Bloomberg, June 10, 2007 (IHT website)
- As fiscal year nears end, World Bank accelerates Africa lending, Bank Information Center, May 27, 2007 (BIC website)
- Statement on the IDA meeting in Maputo, African Forum for Debt & Development, June 27, 2007 (AFRODAD website)
- World Bank IDA begging for more money in Maputo, European Network on Debt & Development, July 6, 2007 (EURODAD website)