Today’s crisis must not reverse Africa’s progress

Today’s crisis must not reverse Africa’s progress

Robert B. Zoellick
Heads of state and government, Excellencies; incoming Chair, Chairperson Dr Ping; Commissioners; ladies and gentlemen. Thank you for the opportunity to address you today. The AU Summit is a wonderful opportunity to meet with Africa’s leaders and to discuss issues of common interest. So it is important to me to be here personally, to listen and learn from you how the World Bank Group can be a better partner. When I addressed this summit one year ago, I spoke of challenges for Africa – including progress toward the Millennium Development Goals.

In the midst of the food price crisis, I benefited greatly from listening to your concerns at the Tokyo International Conference on African Development. Today, confronting Africa’s challenges and ensuring that African voices are heard takes on an even greater importance, as we face a global crisis. Africa will not escape it.

The financial crisis that grew into an economic crisis is now becoming an employment crisis, and in the coming months, for some, it will become a human crisis. Many of you have already seen the danger signs, on top of the poverty, hunger, and malnutrition we saw last year as a result of soaring food and fuel prices. The first effects will be concentrated in sectors that are integrated with the global economy. African exports are expected to fall by two per cent in 2008, relative to the previous year, with some countries experiencing significant declines.

Remittances are drying up. Foreign aid, already $20 billion short of the Gleneagles commitments, is likely to stagnate in 2009, unless we raise the alarm together. And tourism revenues are likely to decline.

The World Bank Group wants to partner with you and African regional organisations to address these critical challenges. To respond rapidly and flexibly to the global crisis, the World Bank Group is increasing IBRD lending for developing country borrowers by $100 billion over three years. This year, we may almost triple our global lending, to perhaps $35 billion. Most important for many of you, we are seeking to fast-track the $42 billion of IDA grants and no-interest loans that you worked with me to raise for the three years of IDA-15. The IDA funds can help with safety net programs, infrastructure, education, and health.

IFC, the Bank Group’s private-sector arm, is launching or expanding four initiatives for: helping recapitalize banks in poor countries, infrastructure financing, trade financing, and refocused advisory services. We are expecting IFC’s private sector investments to total around $30 billion over the next three years. And we want to use these investments to mobilize resources from others. The World Bank Group has greatly expanded financial support for infrastructure in Sub-Saharan Africa to $3.3 billion over the next 3 years, and a further $1 billion of financing to North African countries. We are strongly committed to both financing and facilitating the regional integration process.
In particular, we want to support development of Africa’s main transport corridors and regional power pools. For example, the Bank Group is financing Uganda’s Bujagali hydro power project – an integral component of the country’s strategy to close an energy supply gap. But much more needs to be done. The World Bank Group already has a significant program of support to small- and medium-sized businesses in Sub-Saharan Africa, and we are planning to extend and deepen this support.

We cannot allow today’s crisis to reverse the progress that Africans have already made. As we discuss these issues and other issues at the G-20 and in other fora, we need broader participation, too. In particular, these groups need to include voices of the smaller and poorer countries. We also need to assist you with the dangers of climate change, especially given the important UN negotiations this year.