African leaders seek $100B for early IDA replenishment

African leaders are seeking $100 billion for a pivotal World Bank fund that provides assistance to the lowest-income nations, as the COVID-19 pandemic has created acute financing pressures.

Replenishment for the International Development Association will come a year early, after the bank “front-loaded” assistance from the previous round of recapitalization in 2019, which was meant to last through the middle of 2023.

Côte d’Ivoire President Alassane Ouattara, who convened a high-level meeting Thursday in Abidjan, noted this “would be the largest amount raised in IDA’s history.” The previous replenishment hit $82 billion.

The background: IDA money comes largely through grants and low-cost loans. Normally, donors and borrowers come together every three years to replenish the fund. Experts have called on donors to “go big” in this early funding round, as low-income countries face some of the toughest challenges — such as stalled economic growth — in the pandemic.

Why Africa? In Africa, 39 countries are on the IDA list. Axel van Trotsenburg, managing director of operations at the World Bank, said the institution is increasingly focused on the continent.

“Two-thirds of all IDA resources are going to Africa,” he told the Abidjan meeting, stressing that these countries needed the type of nonearmarked financing the fund can provide so governments can set their own priorities.

IDA makes up a fraction of the total external financing that Africa needs, which is estimated at $285 billion over the next five years.

What’s next: The bank aims to complete this round of recapitalization by December. Samuel Munzele Maimbo, a director at the bank, admits that hitting the target will be a “stretch,” but he told Devex he was optimistic.

“If we pull out all the stops, if people truly appreciate the depth of this crisis and what we are dealing with, I think we can,” he said.