…The target for this replenishment cycle is $120 billion, marking a bold step in addressing urgent global needs
…Since its establishment in 1960, IDA has committed $533 billion to foster economic growth and improve lives, with more than 70% of its global commitments directed toward Africa.
THUR DEC 05 2024-theGBJournal|The 21st Replenishment Pledging Conference of the International Development Association (IDA) opened today with an urgent call for global cooperation to address the intertwined crises of poverty, climate change, and economic inequity.
This replenishment cycle includes an unprecedented financial package designed to bolster the ability of the world’s poorest countries to recover from crises and build longterm resilience.
At the heart of this replenishment is a strong policy package addressing key issues such as people, the planet, infrastructure, digitalization, jobs, gender empowerment, and fragility.
In a significant step towards streamlining processes, IDA has reduced its policy commitments from 1,017 in IDA20 to a much more manageable number in IDA21, cutting through red tape and ensuring greater efficiency in delivering assistance.
This simplification aims to address capacity challenges in recipient nations, ensuring that IDA’s resources are directed where they are needed most without burdening countries with unnecessary obligations.
In addition to the policy overhaul, IDA’s financial terms have been significantly improved to maximize impact. While the final amount of the replenishment depends on donor pledges, the quality and strength of the proposed framework are undeniable.
The target for this replenishment cycle is $120 billion, marking a bold step in addressing urgent global needs.
Dirk Reinermann, Director of IDA Mobilization at the World Bank, highlighted the importance of the process and the expected outcomes: “We’ve streamlined IDA’s commitments, cutting policies by half to ensure agility and reduce unnecessary burdens on recipient nations. The financial framework we’ve proposed reflects the urgency and scale of the challenges we face, and we look forward to ambitious pledges from our donor partners.”
“We’re optimistic about a robust package. Some donors have already indicated significant increases, while others, constrained by fiscal policies, may remain nominally flat in their contributions. However, local currency contributions in euros, yen, and renminbi are substantial. The strength of the dollar might mask these reports when converted,” Reinermann added.
This new financial framework comes at a time when African leaders, who convened earlier this year in Nairobi, issued a collective call for donors to match the growing scale of need with bold financial commitments.
Their call is a reminder of the urgent role that development financing plays in ensuring the world’s most vulnerable can withstand crises and build a more sustainable future.
Since its establishment in 1960, IDA has committed $533 billion to foster economic growth and improve lives, with more than 70% of its global commitments directed toward Africa.
These investments have supported critical sectors such as infrastructure, education, healthcare, digitalization, and climate resilience.
Daouda Sembene, Founder and CEO of Africatalyst, emphasized IDA’s pivotal role as a development partner: “IDA should be seen not just as a concessional resource provider but as a partner working alongside borrower countries to address global challenges.
These challenges are not just for Africa—they are challenges for the whole world. At the same time, it’s crucial to ensure that Africa has the fiscal space to meet its domestic priorities.”
In addition to increasing its financial contributions, IDA is broadening its funding base by engaging non-traditional funders, including private sector actors, philanthropists, and emerging economies.
This expansion aims to create a more resilient and sustainable financing model that is better equipped to meet the scale and urgency of global development challenges. There is a strong emphasis on private sector resource mobilization and domestic resource mobilization in recipient countries.
Trevor Lwere, Economic and Policy Analyst at Development Reimagined, explained the profound impact of focusing on poverty alleviation: “When you invest in the productive capacities of developing nations, you’re addressing multiple challenges simultaneously.
Even modest investments can leverage funds up to four times their value. The model provides long-term, affordable financing, unlike other funding sources which often involve high costs or protracted negotiations.
This approach not only addresses the immediate challenges but also builds long-term resilience. Countries experiencing a decline must take proactive steps to reverse it.
Moreover, nations that maintain previous replenishment levels should follow the example set by Spain, which committed to doubling its contributions, setting a strong precedent for others to increase their pledges early and meaningfully.”
The IDA 21 replenishment also places a strong focus on civil society engagement. This year alone, eight regional forums, including one in Nairobi, have gathered invaluable input that shaped the policy package. Furthermore, a new World Bank Group scorecard will track and ensure the quality and consistency of these engagements, guaranteeing that civil society plays a central role in shaping the development agenda moving forward.
As this historic replenishment process continues, IDA stands poised to play an even more critical role in addressing global poverty, promoting sustainable development, and fostering resilience in the world’s poorest regions.
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