African nations are expected to receive a fresh loan of $150 billion from the World Bank at zero-interest rate.
This was disclosed by the international lender’s President, David Malpass, on Tuesday at the Summit on Financing African Economies held in France.
The loan would be spread out over a period of five years, Malpass noted, adding that the loan was to support the development of the continent.
Malpass said that the loan would come in the form of grants from International Development Association (IDA).
He expressed the commitment of the bank to use “all possible resources, financing tools, and dedicated staff across the continent to improve African lives and business prospects.”
“Over the past decade, the World Bank Group has invested $200 billion in Africa, and over just the next five years, we intend to invest and mobilize another $150 billion to support the continent’s development.
“A large portion of this will be through grants and long-term, zero interest-rate loans from IDA, which continues to provide strong positive net flows to Africa. I want to thank you all for your strong support for the IDA20 replenishment,” he added.
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Malpass also said that African economies need “large inflows of long-term resources” that would aid growth.
He said that “another important part of our support to Africa will be mobilization of the private sector, either directly through IFC and MIGA mobilizations or indirectly through the mobilization of funding by IDA and the International Bank for Reconstruction and Development (IBRD) on capital markets.”
He also shared that a collaborative effort of the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA) would birth a trade finance initiative for African countries.
Malpass said, “IFC’s Managing Director and Executive Vice President, Makhtar Diop, will provide more details on our private sector mobilisation efforts, and I would like to highlight initiatives that President Macron and I discussed recently.
“First, closing the infrastructure gap and improving access to low-carbon electricity. Second, IFC has doubled our trade finance.
“To continue this effort, we are announcing that IFC and MIGA are about to launch a joint trade finance initiative in selected African countries. Third, we are working to expand alternative small-business finance.
“And fourth, to support agribusiness activities, we are proposing a three-year pilot for a user-friendly blended finance facility.”
