The 20th meeting held virtually on Thursday 15th July 2021 was hosted by the President of Ivory Coast, Alassane Ouattara where participating heads of state including Kagame stressed the need to strengthen IDA’s capacity.
Other participants include the President of Senegal, Macky Sall; Axel van Trotsenburg Axel van Trotsenburg, the World Bank Managing Director of Operations and Makhtar Diop, the former Finance Minister of Senegal currently serving as the Managing Director of the International Finance Corporation (IFC) among others.
Speaking during the meeting, Kagame commended World Bank for relentlessly supporting the resilience of African continent particularly during difficult times of COVID-19.
“I also wish to commend the central role that the World Bank has played, and continues to play, in supporting our continent through the Covid-19 pandemic,” he said.
Kagame highlighted that the replenishment of IDA is very ambitious, both financially and in terms of the comprehensive set of funding priorities that have been defined.
“Alongside health systems, we also need to increase investment in infrastructure, climate mitigation, industrial development, and human capital. That is exactly what we need right now, and it is why the World Bank decided to launch the 20th replenishment cycle early,” he said.
The President urged African countries to do their part by building accountable and efficient service delivery institutions.
He further stressed the need to mobilize more domestic tax revenue and invest a greater share of own resources in the health and education budget.
“However, these efforts will not produce the good results we want without greater attention to peace and security. This point was emphasized earlier by my brother, President Ouattara, Chairperson Moussa Faki, Makhtar Diop, and Axel van Trotsenburg. In all of Africa’s sub-regions, we see examples of gains being eroded because of conflict and fragility. This diverts resources from other development priorities, and even affects regional neighbours,” noted Kagame.
He emphasized that there is a real need to work together closely to find a sustainable financing mechanism for peace and security institutions in Africa, alongside IDA20 and reinforcing it.
“If implemented, the bold vision articulated in this Declaration will enable Africa to recover from the pandemic and return to a solid growth trajectory. Of course, it goes without saying that the private sector has a very important and central role to play in partnering with government,” he stated.
Kagame also pledged to join the call to attract at least US$100 billion for the 20th IDA replenishment by the end of 2021.
“We must maintain focus on the most important thing, and that is continuing to make the progress we are making. We cannot allow obstacles to become permanent setbacks, especially those within our power to fix,” he said.
The International Development Association (IDA) is the part of the World Bank that helps the world’s poorest countries. Overseen by 173 shareholder nations, IDA aims to reduce poverty by providing zero to low-interest loans (called “credits”) and grants for programs that boost economic growth, reduce inequalities, and improve people’s living conditions.
IDA is a multi-issue institution, supporting a range of development activities that pave the way toward equality, economic growth, job creation, higher incomes, and better living conditions. IDA’s work covers primary education, basic health services, clean water and sanitation, agriculture, business climate improvements, infrastructure, and institutional reforms.
IDA complements the World Bank’s original lending arm—the International Bank for Reconstruction and Development (IBRD). IBRD was established to function as a self-sustaining business and provides loans and advice to middle-income and credit-worthy poor countries. IBRD and IDA share the same staff and headquarters and evaluate projects with the same rigorous standards.
IDA is one of the largest sources of assistance for the world’s 74 poorest countries and is the single largest source of donor funds for basic social services in these countries. IDA lends money on concessional terms. This means that IDA credits have a zero or very low interest charge and repayments are stretched over 30 to 40 years, including a 5- to 10-year grace period. IDA also provides grants to countries at risk of debt distress.
In addition to concessional loans and grants, IDA provides significant levels of debt relief through the Heavily Indebted Poor Countries (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI).
In the fiscal year ending June 30, 2020, IDA commitments totaled $30.48 billion, of which 26 percent was provided on grant terms. This includes 305 new projects.
Furthermore, IDA’s support is part of the broader $160 billion World Bank Group response to the COVID-19 pandemic over a 15-month period ending June 2021. It includes $50-55 billion in low-interest credits and grants focused on saving lives, protecting the poor and vulnerable, creating jobs, saving businesses, and building a more resilient recovery. Since 1960, IDA has provided $422 billion for investments in 114 countries. Annual commitments have increased steadily and averaged about $25 billion over the last three years.