It is time for transformation in Africa’s poorest countries.

Africa’s Poorest Nations: A Call for Transformation

Countries worldwide, particularly the poorest among them, find themselves in a constant struggle to make ends meet. Trapped in a cycle of debt, crisis, pandemics, and fragility, these nations face seemingly insurmountable challenges. While development spending appears to be on the rise globally, recent analysis from the ONE Campaign paints a grim picture. In 2024 alone, an estimated $50 billion will flow out of developing countries, as an increasing number of nations find themselves paying more in debt interest than they receive in external assistance. Many of these struggling countries are located in Africa, where nearly one in three nations is now poorer on average than before the Covid-19 pandemic, according to the World Bank.

Concessional finance, in the form of grants and low-interest loans, has long been a lifeline for these nations, enabling investments in critical areas such as healthcare, education, sanitation, and infrastructure. The International Development Association (IDA), established by the World Bank in 1960, has been the largest provider of such funding, helping millions of people escape poverty.

The impact of IDA in Africa is undeniable. Through its grants, millions have gained access to electricity in Tanzania, thousands have become homeowners in West Africa, millions now enjoy more affordable internet services in Malawi, and vulnerable women and girls in the Sahel have gained access to better opportunities. These achievements represent transformative changes in people’s lives. For instance, Innyatou from Niger, whose mother and grandmother were denied an education due to early marriage, now has the chance to break the cycle, thanks to an IDA scholarship. Such success stories illustrate the brighter future that awaits individuals when IDA intervenes.

This year, as IDA seeks its 21st replenishment, Africa stands at a turning point. The upcoming IDA for Africa Heads of State Summit, hosted by President Ruto of Kenya, is expected to showcase a different approach from the continent. Rather than solely relying on financial aid, African leaders are focused on creating investment opportunities, fostering economic independence, and promoting prosperity. This shift is crucial, particularly considering that the recent African Transformation Index reveals a lack of progress, with an average score of just 30.3 out of 100. To drive systemic change, African leaders must enhance IDA’s impact by prioritizing domestic resource mobilization.

Looking ahead to the Heads of State Summit, several key priorities emerge for African leaders, IDA donors, and the World Bank.

To African leaders: Seize this opportunity to influence IDA’s policy directions boldly. IDA in Africa must become more than the sum of its parts, serving as a catalyst for economic transformation. While celebrating individual project results is crucial, it is equally important to connect these impacts, strengthen systems, promote information sharing, and engage in long-term planning. By doing so, governments in the world’s poorest countries will eventually develop the capacity to deliver more effectively for their people.

To support Africa’s transformation, IDA in Africa must transcend borders. As the Cameroonian proverb suggests, “Rain does not fall on one roof alone.” Poverty and progress are not confined to specific countries; therefore, IDA’s investments must keep pace and promote regional integration. By leveraging the African Continental Free Trade Area, IDA can support African value chains, help countries combat and adapt to climate change, foster the free movement of people, and create job opportunities. This approach, while not new for IDA, requires significant amplification to make a lasting impact on the continent.

Transparency and accountability must become the guiding principles of IDA in Africa. Establishing clear milestones, robust communication channels, and consistent citizen engagement will foster much-needed trust, ensuring that allocated funds address the needs of the African people effectively.

To IDA donors: A historically significant replenishment is needed, requiring increased support. IDA21 must exceed $100 billion, necessitating a cash injection of $28-30 billion from donors that can be leveraged to achieve this goal. This pivotal moment offers an opportunity to facilitate global recovery from the impacts of COVID-19, enhance resilience to ongoing crises and conflicts, and bridge the widening inequality gap between the world’s poorest and richest countries. Existing IDA donors must demonstrate greater ambition than in previous replenishment cycles, despite domestic challenges, while new donors are urged to step forward and contribute.

To the World Bank: Continue efforts to improve effectiveness and efficiency, laying the groundwork for the future of IDA. It is crucial that IDA not only be substantial in size but also efficient, effective, and laser-focused on impact. The World Bank’s initiatives to reduce project preparation time, streamline implementation processes, and prioritize impact are commendable. Grant-based financing and the provision of lowest possible interest rates are imperative for countries most in need.

Ultimately, IDA’s true success lies in the day it becomes obsolete. Planning for the future of Africa requires IDA to adapt its approach as recipient pools shrink, needs become more specialized and localized, and reaching the world’s poorest communities becomes increasingly challenging.Africa’s Poorest Nations: A Call for Transformation

Countries worldwide, especially the poorest among them, are facing immense challenges, including debt, crises, pandemics, and fragility. Africa, in particular, is struggling, with one in three countries now poorer than before the Covid-19 pandemic. While development spending appears to be increasing globally, a recent analysis by the ONE Campaign projects that developing countries will see a net outflow of $50 billion in 2024, as debt interest payments exceed external assistance. In this context, the International Development Association (IDA) plays a crucial role in providing grants and low-interest loans to uplift the lives of millions in Africa.

IDA’s impact in Africa is substantial. For example, in Tanzania, 6.3 million more people now have access to electricity due to IDA grants. In West Africa, 12,000 individuals have become homeowners through IDA support. In Malawi, 4.3 million people benefit from more affordable and higher-quality internet services. Additionally, two million vulnerable women and girls in the Sahel region have gained access to better opportunities. These achievements reflect the transformative power of IDA’s investments, changing lives and breaking cycles of poverty.

The 21st replenishment of IDA provides a turning point for Africa. The upcoming IDA for Africa Heads of State Summit, hosted by President Ruto of Kenya, signifies a shift in approach. African leaders are now focused on creating investment opportunities, fostering economic independence, and promoting prosperity, rather than solely relying on financial aid. This change is essential, given Africa’s low score of 30.3 out of 100 on the African Transformation Index. African leaders must prioritize domestic resource mobilization to enhance IDA’s impact and drive systemic change.

At the summit, African leaders should boldly influence IDA’s policy directions. IDA in Africa must go beyond individual project results and connect impacts to strengthen systems, promote information sharing, and engage in long-term planning. This will empower governments in the poorest countries to deliver more effectively for their people.

To support Africa’s transformation, IDA in Africa must transcend borders and promote regional integration. This can be achieved by leveraging the African Continental Free Trade Area to support African value chains, combat climate change, facilitate the free movement of people, and create jobs. Transparency and accountability are crucial for IDA in Africa, with clear milestones, robust communication, and citizen engagement building trust and ensuring funds meet the needs of the African people.

IDA donors play a vital role in this transformation. A historically significant replenishment exceeding $100 billion is needed, requiring increased support. Existing IDA donors must show greater ambition, despite domestic challenges, and new donors should step forward to contribute.

The World Bank must continue efforts to improve effectiveness and efficiency. IDA must be efficient, effective, and focused on impactful outcomes. The Bank’s initiatives to reduce project preparation time, streamline implementation, and prioritize impact are commendable. Grant-based financing and low-interest rates are crucial for countries most in need.

Ultimately, IDA’s true success lies in its obsolescence. As recipient pools shrink and needs become more specialized, IDA must adapt its approach to reach the world’s poorest communities effectively.

An economically independent and stable Africa benefits the world as a whole. With an historically large IDA replenishment, Africa can become a stronger contributor to global prosperity. This is an opportunity to imagine and build a better future for all. Let’s not waste it.