Uchumi : Empowering Progress , How IDA funds are Transforming developing nations - Wazalendo 25 Blog

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30 May 2024

Uchumi : Empowering Progress , How IDA funds are Transforming developing nations






The International Development Association (IDA) has been empowering nations and transforming lives since its establishment in 1960. Through grants and low-interest loans, IDA has supported 75 developing countries.

1. Empowering Developing Nations.

The International Development Association (IDA) is a key component of the World Bank, committed to supporting developing countries. Established on September 24, 1960, it provides grants and low-interest loans to these nations, enabling them to invest in their futures, improve livelihoods, and create safer, more prosperous communities globally.

IDA offers crucial support to 75 developing countries, mainly through grants and loans with very low or zero interest rates, payable over extended periods ranging from 30 to 40 years. Over half of these countries receive grants, which alleviate the burden of repayment, benefiting those most vulnerable to debt distress.

Funded by contributions from member country governments, IDA has replenishments every three years to ensure it has adequate resources. The latest replenishment, IDA20, concluded in December 2021, securing a record $93 billion for fiscal years 2022-2025.

Beyond financial aid, IDA assists countries in managing their debt through initiatives such as the Heavily Indebted Poor Countries (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI). In the fiscal year ending June 30, 2023, IDA committed $34.2 billion, including $7.3 billion in grants, with a significant $25.8 billion allocated to the Africa region. 

Since its inception, IDA has disbursed $533 billion to 115 countries, averaging about $36 billion in annual commitments in recent years. Remarkably, 36 countries have transitioned out of IDA support, and some, including China, Chile, India, South Korea, and Turkey, have become contributors to IDA.


2. Tanzania's Success with IDA.

In her address at the International Development Association (IDA) Conference in Nairobi, Kenya, on April 29, 2024, President Samia Suluhu Hassan outlined Tanzania's achievements in collaboration with IDA. These include significant progress in improving maternal and child health, with one of the best systems in Africa. Tanzania has also excelled in enhancing rural electrification and increasing access to clean water. Moreover, the initiation of major flood control projects, particularly in Dar es Salaam, such as the Msimbazi Basin Development Project.

President Samia emphasized the urgent need for fair financial policies from international organizations, advocating for terms that are affordable and that promote substantial investments in Africa's human capital and technological advancements. She stressed the importance of IDA21 focusing on enhancing implementation capacities for projects between IDA and member countries, aligning with Africa's development goals and pressing needs.

Tanzania's collaboration with IDA extends to 25 strategic projects, covering sectors such as transportation, social development, energy, education, water, and tax system improvement. These efforts, in partnership with IDA, to alleviate congestion and enhance road infrastructure in Dar es Salaam, including projects like the Kijazi Interchange and bus lanes benefiting over 200,000 residents daily, are transforming the economic landscape of the city.


3. Africa's Development Drive.

At a landmark summit on April 29, 2024, nineteen African Heads of State demonstrated unprecedented unity, pledging to align development aspirations across the continent. This ambitious agenda, designed to substantially enhance living standards and forge fresh opportunities, positions the International Development Association (IDA) of the World Bank as a key element for realizing these goals. 

The summit not only highlighted commitments but also witnessed the formation of a powerful partnership, a coalition that unites civil society, foundations, the private sector, and youth. This coalition is poised to advocate for a robust and ambitious replenishment of IDA's resources, effectively fueling Africa's development drive.

Following the summit, a joint communique outlined leaders' strong commitment to bolster governance, unleash the private sector's potential for job creation, mobilize domestic resources, and fulfill climate change pledges. Moreover, they prioritized expanding energy and digital access, alongside addressing climate change and conflict challenges. 

The summit, co-hosted by the Government of Kenya and the World Bank Group, reiterated the crucial role of both IDA, the World Bank Group’s fund focused on the most vulnerable, and the global community in supporting Africa's aspirations.

The journey towards IDA21 includes several key milestones. It began with the First IDA21 Replenishment Meeting, held virtually on March 18-19, 2024. This was followed by the Second Meeting on April 21, 2024, in Washington D.C. 

The upcoming Third Meeting is scheduled for June 18-21, 2024, in Kathmandu, Nepal. The Fourth Meeting is set for October 28-29, 2024, in Washington D.C. The Final Pledging and Replenishment Meeting on December 10-11, 2024, will be a crucial event for making concrete commitments and pledges to support IDA21's implementation and impact.


Thank you.

Written by Christopher Makwaia
Tel: +255 789 242 396

— The writer, is a University of West London graduate (formerly Thames Valley University) and an expert in Management, Leadership, International Business, Foreign Affairs, Global Marketing, Diplomacy, International Relations, Conflict Resolution, Negotiations, Security, Arms Control, Political Scientist, and a self-taught Computer Programmer and Web Developer.

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