World Bank is set to triple its reconstruction and development lending geared towards developing countries to mitigate the harsh impact of the global economic downturn. The bank’s US$12 billion loan projection has been raised to US$ 35 billion to help achieve the International Bank for Reconstruction and Development (IBRD) goals.
Ken Ohashi country director of Ethiopia and Sudan elucidated the bank’s crisis response and the revised growth forecast for the 2009 fiscal year. According to him, the revised forecast GDP growth of Sub Saharan African countries will be marked by a 2.4 per cent decline, indicating a 1.8 cutback from their initial projection.
In a roundtable discussion with journalists last week in Addis Ababa, Mr. Ohashi said that IBRD, faced with the impact of the crisis in Africa, plans to triple its lending to 35 billion USD for the 2009 fiscal year to enable developing countries cope with the situation. Over the next three weeks IBRD will lend an amount of 100 billion USD through its fast disbursing development policy (DPL).
Meanwhile, the International Financial Corporation (IFC) of the bank is also planning to lend an investment volume of 12 billion USD per year for the next three years, the banks crisis response document reads. According to the document, the IFC has launched new crisis response initiatives in both investment and advisory services. Financing for the new initiatives is expected to total about 30 billion USD over the next three years.
Streamlining food crisis support
Vulnerability Financing Response (VFR) a facility launched by the bank in order to streamline crisis support to poor and vulnerable countries has so far facilitated 1.2 billion USD in response to the global food crisis while trying to launch a multi-donor country loan trust fund to provide rapid social responses that will prioritize the agriculture sector as well as employment.
The United Kingdom has announced its intention to contribute to this fund, the document reads.
According to the banks revised growth forecast Nigeria will register 2.9% GDP growth a 2.9 % cutback from its earlier projection. Similarly South Africa’s GDP growth will only be 1% a 1.2% difference from its earlier forecast.
