World Bank supports to Ghana, others hit $53bn
by Masahudu Ankiilu Kunateh
The World Bank Group has committed $52.6 billion in loans, grants, equity investments, and guarantees to help promote economic growth, overcome poverty, and promote economic enterprises in developing countries including Ghana in 2012.
The Bank recently lowered its growth forecast for 2012 to 5.4 per cent for developing countries, down from its June estimates of 6.2 per cent, and noted that developing country budgets and central banks are not as well placed as they were in 2008/09 to address slowing economies. Their ability to respond may be constrained if international finance dries up and global conditions deteriorate sharply.
According to senior officials of the bank, as developing countries face strong economic headwinds, the Bank Group supported an estimated 884 operations to promote opportunity and get needed services to the poor for example, by improving education and health services, promoting the private sector, building infrastructure, and strengthening governance and institutions.
The World Bank Group institutions contributing to this financial outcome are: the International Bank for Reconstruction and Development (IBRD), which provides financing, risk management products, and other financial services to members; the International Development Association (IDA), which provides interest-free loans and grants to the poorest countries; the International Finance Corporation (IFC), which makes equity investments, and provides loans, guarantees and advisory services to private-sector business in developing countries; and the Bank Groups political risk insurance agency, the Multilateral Investment Guarantee Agency (MIGA).
The Bank is well positioned for future challenges, said World Bank Group President Robert B. Zoellick, whose term as President ends at the close of the Fiscal Year 2012 (FY12).
In Zoellick’s own words: “Since I joined the institution, the Bank Group has committed over $300 billion most of it to help countries overcome food and economic crises. But just as important as the finance is our ability to work with countries both the public and private sectors as clients and to customize our services to address their problems. I would like to thank Bank Group staff for their hard work in rising to the challenge during my term and express my gratitude for their ability to respond quickly and flexibly to the needs of our partner countries and companies”
As the 11th president of the World Bank, Mr Zoellick turned around an institution in trouble in 2007, recapitalized the Bank, and expanded financing for the poorest countries following the food, fuel and financial crises of recent years. He modernized the Bank by making it more accountable, flexible, fast-moving, transparent, and focused on good governance and anti-corruption. He has increased representation of developing countries in governance and staffing and encouraged developing countries to set their own priorities rather than have them dictated from the Bank. His record has also been marked by an increased role for the private sector through IFC, which under his leadership has recruited sovereign wealth funds and pension funds to invest in poor countries, especially in Africa.
According to preliminary and unaudited numbers as of June 29, IDA commitments in FY12 were $14.7 billion, down from $16.3 billion in FY11. The largest share of resources was committed to Africa, which received around 50 per cent of total IDA lending in FY12, followed by South Asia at around 36 per cent of total.
IBRD commitments totalled $20.6 billion significantly higher than the historical average ($13.5 billion in fiscal 200508), but less than the record $44.2 billion in fiscal 2010, when the crisis peaked. Europe and Central Asia and Latin America and the Caribbean received the largest shares of IBRD lending, each receiving $6.2 billion in new commitments.
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