President of the World Bank, David Malpass, says the Bretton Wood institution is planning to mobilize and invest $150 billion in Africa over the next 5 years.
The $150 billion targeted investment in the continent, comes on the back of an already $200 billion investment made over the last 10 years.
Making the disclosure at a media roundtable for Western and Central Africa, Mr Malpass noted that the investments will largely be made through grants and long-term zero interest rate loans which provides a strong net-positive flow for Africa from the International Development Association (IDA).
“Over the last ten years, the World Bank Group has invested over $200 billion in Sub-Saharan Africa and, as I announced on Tuesday at the summit in Paris, in just the next five years, we intend to invest and mobilize about $150 billion in Africa to support the continent’s recovery. And a large portion of that is through grants and long-term zero interest rate loans from IDA, which provides a strong net-positive flow for Africa,” averred Mr Malpass.
“We’re working full speed on an ambitious IDA20 replenishment, to be concluded by December 2021, and that will be critical for the concessional financing and grants that the IDA countries in Africa need. That gives you the context for the funding support that we’re doing both for the public sectors and the private sectors through IFC in Africa. It’s an all-out effort by the World Bank to provide as much support as possible during the crisis,” he added.
The Covid-19 pandemic has ravaged economies around the globe particularly that of African economies.
Aside significantly reducing the growth prospects of African economies in 2020, the pandemic increased the fiscal deficits of countries on the continent as government expenditure driven by the pandemic outpaced the already insufficient revenues.
Public debt stock of African countries increased significantly further exacerbating the debt vulnerability of African economies.
In the case of Ghana, projected GDP growth of 6.9 percent for 2020 reduced to 0.4 percent at the end of 2020. Fiscal deficit also rose from 4.7 percent in 2019 to 11.7 percent in 2020, occasioned by falling revenues and rising expenditure.
Increment in the country’s fiscal deficit led to a 13.7 percentage points increment the country’s public debt which stood at 76.1 percent at the end of 2020.
The World Bank’s $150 billion investment in Africa targeted at both the private and public sectors will be of enormous benefit to African economies.
In Ghana for instance, such an investment in the government’s Ghs 100 billion Ghana CARES programme will help revitalize, strengthen and transform the Ghanaian economy.
