Why key international body needs more funds now than ever

Zanzibar. Global headwinds such as climate change, wars and pandemics have heightened the need for more funds for the International Development Association (IDA) so that it can better support vulnerable countries.

This was revealed yesterday as leaders gathered in Zanzibar for the mid-term review of the twentieth cycle of the International Development Association (IDA20).

Zanzibar President Hussein Ali Mwinyi said IDA’s needs were now more  substantial than ever.

He said due to recent global shocks, attained economic growth in sub-Saharan Africa had fallen short of making a substantial dent in extreme poverty and boosting prosperity.

“As it stands, the poverty level in the region remains alarmingly high, hovering at 37.6 percent in 2023. Furthermore, the number of people living in deprivation has also increased,” Dr Mwinyi said.

Launched in 2022, IDA20 is a $93 billion package that was dedicated to help low-income countries rebuild their economies in the face of overlapping crises—climate change, Covid-19, conflict, inflation, rising debt, and food insecurity—which are hitting the poorest people hardest.

Its cycle runs from 2022 to 2025, and donor and borrower representatives from different parts of the worlds will be meeting in Zanzibar for three days from yesterday to discuss the progress and set precedent for IDA21.

“The IDA20 cycle was the largest replenishment in IDA’s history. As such, it is critical that we forge an ambitious path ahead to complete the current cycle,” President Mwinyi said.

“The success of this Midterm Review lies not just in effectively implementing the remainder of IDA20, but crucially in laying the foundations for an equally ambitious IDA 21 replenishment, with additional contributions to increase support to IDA countries,” he added.

 World Bank Group president Ajay Banga said with the vision for sustainable development and fighting property the limits of of this important concessional resource have been pushed and more funding are needed.

 “This must drive each of us to make the next replenishment of IDA the largest of all time. We need everyone -- donors, shareholders, philanthropies to step up, join us and bring their ambition to the fight. Otherwise the potential for IDA will never be realised. But the change we aspire to achieve cannot just be bought. We must reform to be faster, and more efficient,” said Mr Banga.

He added that during the midterm review meeting, leaders would  have an opportunity to reflect on IDA’s journey and reaffirm to its founding principles.

“We will have the opportunity to commit ourselves to the vision that sparked the creation of IDA. A vision of the world where poverty is not a barrier to human potential,” he told delegate.

Earlier, President Mwinyi, who represented President Samia Suluhu Hassan, said IDA’s portfolio has grown substantially in both parts of Tanzania including the $200 million support to the Rural Electrification Program which has connected more than 4.5 million people since 2017, significantly higher compared to the target of 2.5 million people.

“This programme was so impactful that it attracted additional financing of $335 million to help realize even better outcomes for rural communities,” he said.

In Zanzibar, the President said Zanzibar Urban Services Project (ZUSP) received support from IDA amounting to $93 million to improve access to urban services and conserve this physical cultural heritage.