IMF, World Bank & IFI Round-Up

The Islamic finance industry in Africa is set to expand to as much as USD 235 billion as economic growth accelerates and the continent attracts investments, Moody’s Investors Service said. Islamic banking in Africa is still in its “infancy” with 37 financial institutions providing financial services compliant with Shariah law, Moody’s analyst Anouar Hassoune said in a report, Bloomberg reported. The Shariah-compliant banking industry was valued at USD 18 billion at the end of last year, less than 8 percent of the potential market size, Moody’s said. The global Islamic financial market may expand to USD 2.8 trillion by 2015, from between USD 750 billion and USD 1 trillion Currently, according to an estimate by the Kuala Lumpur-based Islamic Financial Services Board.

Bulgaria this week said it has paid early EUR 300 million (USD 428 million) worth of debt owed to the World Bank. The payment will result in a decrease of the amount of debt and improvement of its interest rate structure, thus leading to lower risk of increasing interest expenses in the following years, the Finance Ministry said in a statement. The country repaid early six World Bank loans worth a total EUR 266.9 million and USD 12.8 million, interest included, it said. The early payment has been made taking into account the budget performance forecasts for 2008 and the level of the country’s fiscal reserve.

Donors in Dhaka on March 25 assured Bangladesh of their fund support to help finance long-term programs for mitigation of and adaptation to climate change. Representatives from heads of missions and development partners, including the World Bank, the Asian Development Bank, UK Department for International Development (DFID), USAID, Japan, the UK, the Netherlands and Denmark, took part in the discussion. The conference was told that the world community would help Bangladesh showcase its vulnerability to climate change as well as its knowledge developed so far to respond to and address the vulnerability.

The IMF and World Bank say Gambia has met requirements to qualify for full debt relief but that the tiny West African country was still “at high risk of debt distress,” Reuters reports. “Of the 11 triggers for reaching the floating completion point, nine have been fully achieved while two partially achieved, for which the staffs recommended that waivers be granted,” the global institutions said in a joint staff paper. The IMF and World Bank said that Gambia, however, did not meet requirements to qualify for additional debt relief under the global enhanced Heavily Indebted Poor Countries (HIPC) initiative to completely write off its remaining debt burden.

The World Bank plans to revise downward its Indonesian economic growth rate projection for 2008 to 6.0 percent from 6.4 percent due to the US economic slowdown but assures the move will not affect the government’s effort to achieve the target of reducing the poverty rate, World Bank Country Director for Indonesia Joachim von Amsberg said.

The World Bank strongly recommended to PPP-led coalition government to take extraordinary measures to overcome Pakistan?s energy crisis threatening its economic growth. The World Bank?s delegation headed by Vice President South Asia Region Praful Patel, met the PPP senior leaders and economic team of Prime Minister Syed Yusuf Raza Gilani government to extend support to Pakistan?s elected government.

Japan has pledged USD 220 million in low-interest loans to Indonesia to help improve the investment environment and alleviate poverty, the foreign ministry said. The loans are part of a project co-financed by the World Bank and the Asian Development Bank aiming at ensuring stability in the Indonesian economy, a ministry statement said.

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