African Caucus Seeks $120bn IDA Financing to Tackle Food, Energy, Climate, Other Challenges
Bagudu: We are not being supported as much as we think we should have
James Emejo in Abuja
The African Caucus Meeting of Finance Ministers and Central Bank Governors has reiterated the call of Heads of State to donor countries under the International Development Association (IDA), to boost support for borrowing member countries to $120 billion.
The package is expected to help combat persistent and emerging challenges including climate change, food insecurity, energy deficit, and fragility.
The most recent replenishment of IDA’s resources, the 20th (IDA20), which was finalised in December 2021, resulting in a historic $93 billion financing package for IDA countries for the 2022-2025 fiscal years.
The financing package remained the largest ever mobilised in IDA’s 61-year history.
IDA is the part of the World Bank that helps the world’s low-income countries with grants and low-interest loans to invest in their futures, improve lives, and create safer, more prosperous communities around the world.
Partners meet every three years to replenish IDA funds and review IDA’s policies. Due to the urgent development needs of IDA countries, the replenishment was advanced by one year.
Speaking earlier at a panel session on IDA interventions, Minister of Budget and Economic Planning, Senator Abubakar Bagudu, said, “We are not, as a continent, growing as fast as we should” adding that “We are not being supported as much as we think we should have”.
He said, “While it is possible for a country with 10 million people in Europe to find $200 billion, Nigeria with over 200 billion people can hardly find $10 billion.
However, the caucus request was part of the outcomes of its 2024 African Caucus meeting which was concluded over the weekend in Abuja.
The meeting further recognised the importance of intra-African trade in unlocking production, investments, and jobs in Africa, and took cognizance that African countries continue to trade with the rest of the world more than among themselves.
The meeting agreed that addressing both tariff and non-tariff barriers to intra-African trade—including fragmented payment ecosystems, poor energy access, lack of infrastructure, inconsistent regulatory frameworks, and divergent cross-border procedures— was critical to bolstering Africa’s share of global trade and stimulating sustainable and inclusive growth in the continent.
Theme, “Facilitating Intra-African Trade: Catalyst for Sustainable Economic Growth in Africa”, the meeting also pointed out that trade could stimulate economic growth by creating opportunities for increased production, investment, and job creation.
It stressed that trade provides access to larger markets, new technologies, and capital,noting that the African Continental Free Trade Area (AfCFTA) aims to promote trade among African countries by reducing trade barriers, harmonising regulations, and facilitating the movement of goods and services within the continent.
The Governors, specifically underlined four key pathways to boosting intra-Africa trade, namely, strengthening pan African payment ecosystem, enhancing energy access, affordability, and connectivity; leveraging partnerships with MDBs, and reforming global financial architecture.
The caucus also called on the IMF and World Bank Group to ensure that their support to member countries continues to be guided by principles of balance and evenhandedness, and consistent with their own policies, especially at a time when countries are being assailed by adverse exogenous shocks and facing immense financing needs.
The gathering took place amid a synchronised global economic slowdown, with global GDP growth decelerating due to monetary tightening in developing countries and disruptions in global supply chains, exacerbated by geopolitical tensions, including the Ukraine and Palestinian crises.
The meeting noted that these factors further strain development prospects, adding that despite Africa’s remarkable resilience, evidenced by its GDP growth, intra-African trade remains relatively low, accounting for only about 14.4 per cent of total African exports.
A statement issued by Director, Information and Public Relations, Federal Ministry of Finance, Mohammed Manga, also stated that the outcomes of the 2024 African caucus deliberations will be summarized in a Memorandum to be delivered to the Heads of the Bretton Woods Institutions (BWIs), in October 2024, during the Annual Meetings of the IMF and the WBG, in Washington, USA.
