Commitment by Mogadishu’s largest single lender is latest in series of deals to forgive ‘unsustainable’ $4.5bn debt
Somalia has announced that more than $1.1bn (£860m) of outstanding loans will be cancelled by the US, a sum representing about a quarter of the country’s remaining debt.
The announcement is the latest in a series of agreements in which Somalia’s creditors have committed to forgiving its debt obligations.
Continue reading...Downward trend in oil price from higher production, falling demand in China and clean energy to continue
Petrol and food prices will fall over the next two years thanks to a glut in oil production, the World Bank has said, offering hope to consumers that the cost pressures of the past three years could start to ease.
Its analysis found that this year’s downward trend in the oil price resulting from increased production, falling demand in China and the transition to clean energy is set to continue even if the conflict in the Middle East worsens.
Continue reading...Too many nations, including China and India, are relying on outmoded strategies to become advanced economies, says report
More than 100 countries – including China, India, Brazil and South Africa – risk becoming stuck in a “middle-income trap” unless they adopt radical growth strategies for their economies, the World Bank has said.
The Washington-based development organisation said emerging market nations would struggle to close the gap on US living standards unless they relied less heavily on investment to increase growth.
Continue reading...Foreign ministers confident of agreement to use bank assets as security for Ukraine reconstruction loan
Hopes of a multi-country deal to use $300bn of Russian state assets frozen in the European banking system to support Ukraine have grown after it emerged that G7 ministers were confident of overcoming technical and political obstacles at a meeting in northern Italy on Saturday.
The Canadian finance minister, Chrystia Freeland, said she was optimistic that G7 leaders would reach an agreement, as support coalesced around a plan to use frozen Russian central bank assets as security for a $50bn (£39bn) loan.
Continue reading...Charities and campaign groups are calling on bodies to say they may stop funding country if legislation comes into effect
The World Bank and the International Monetary Fund are coming under pressure to use their financial might to persuade Ghana to reconsider a proposed law that could lead to anyone who identifies as LGBTQ+ being jailed for three years.
Charities and campaign groups are calling on the global development bodies to tell Ghana they may stop funding the country if the proposed legislation – which will be challenged in the country’s supreme court next week – comes into effect.
Continue reading...Increase in cost of crude could drive inflation up and force central banks to keep interest rates high
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A serious escalation of tensions in the Middle East would push the price of oil above $100 (£80) a barrel and reverse the recent downward trend in global inflation, the World Bank has said.
The Washington-based institution said the recent fall in commodity prices had been levelling off even before the recent missile strikes by Iran and Israel – making interest rate decisions for central banks tougher.
Continue reading...Plan to expand Ruaha national park has been beset by allegations of abuse, leading bank to withhold final $50m of $150m budget
The World Bank has suspended financing intended to develop tourism in southern Tanzania after allegations of killings, rape and forced evictions.
The bank began investigating last year after being accused of enabling abuses around Ruaha national park, which was due to double in size as part of a World Bank-supported programme.
Continue reading...IMF has revised up growth forecasts but medium-term prospects remain poor as globalisation goes into reverse
The 2020s are almost halfway over and are on course to be the most difficult decade for the global economy since the 1930s. Every finance minister and central bank governor at the spring meeting of the International Monetary Fund in Washington last week knows that, even if they were not prepared to admit it publicly.
The IMF likes to look on the bright side. It revised up slightly its forecast for global growth and now thinks scarring from the coronavirus pandemic and the cost of living crisis will be less severe than it originally feared. Interest rates have risen without triggering the recessions that were predicted. A soft landing has been finessed. The performance of some countries – the US and India to take two examples – has been strong.
Continue reading...Poverty reduction drive all but halted across many nations as Bank calls for more money to tackle a ‘great reversal’
The devastating impact of the pandemic on the world’s poorest countries has brought poverty reduction to a halt and led to a widening income gap with nations in the rich west, the World Bank has warned.
In a report released to coincide with its half-yearly meeting, the Washington-based organisation said half of the world’s 75 poorest nations had seen income per head rise more slowly than in developed countries over the past five years.
Continue reading...Environmental and animal welfare groups call on lender to phase out support for ‘industrial’ livestock operations
The private sector arm of the World Bank is facing claims that it contributes to global heating and the undermining of animal welfare by providing financial support for factory farming, including the building of pig farming tower blocks in China.
A coalition of environmental and animal welfare groups is calling on the World Bank to phase out financial support for large-scale “industrial” livestock operations. More than $1.6bn was provided for industrial farming projects between 2017 and 2023, according to an analysis by campaigners.
Continue reading...Findings come as UN secretary general calls on Israel to give unconditional access to Gaza for aid relief
Half the population of the Gaza Strip is at imminent risk of famine as food shortages approach catastrophic levels for more than a million people, the World Bank has warned.
Almost six months after the war between Israel and Hamas began, the Washington-based Bank said urgent action was needed to prevent widespread deaths from starvation within the next two months.
Continue reading...Beijing must be more ready to support countries facing distress, says deputy chief economist
China holds the key to speeding up debt relief and ending the “silent crisis” that is holding back attempts to tackle poverty in the world’s poorest countries, a senior World Bank official has said.
Ayhan Kose, the Bank’s deputy chief economist, said Beijing needed to be more active in negotiations to provide financial support for those countries already in, or close to, debt distress.
Continue reading...Washington-based development organisation providing $20m for citizens suffering ‘multidimensional poverty’
The economy of Gaza has ground to an almost total standstill as a result of the war between Israel and Hamas that has left about 85% of workers without jobs, the World Bank has said.
In an assessment of the economic impact of the two-month-long conflict, the Washington-based development organisation said Gaza was operating at only 16% of its productive capacity and was in “deep recession”.
Continue reading...Calls grow for independent inquiry after the bank’s internal watchdog found 21 cases of child sexual abuse by teaching staff
The World Bank has been accused of failing to prevent child abuse at a school chain it funded in Kenya.
The bank’s internal watchdog, the Compliance Advisor Ombudsman (CAO), found that the bank’s International Finance Corporation (IFC) had failed to satisfy its own environmental and social requirements before it started funding Bridge International Academies in 2014, and during its supervision of its investment in the project, which came to an end last year.
Continue reading...World leaders will reconvene in Abu Dhabi before UAE’s Cop28 after talks broke down two weeks ago
Governments will meet this weekend for a last-ditch attempt to bridge deep divisions between rich and poor countries over how to get money to vulnerable people afflicted by climate disaster.
Talks over funds for “loss and damage”, which refers to the rescue and rehabilitation of countries and communities experiencing the effects of extreme weather, started in March but broke down in rancour two weeks ago.
Continue reading...In an exclusive interview, Akinwumi Adesina, head of the African Development Bank, says the outlook is good for a continent with the workers of the future and the best investment opportunities
Africa holds the future workforce for the ageing economies of the west, according to one of the continent’s leading financial figures, who also said it was time to ditch the myths around corruption and risk.
In an exclusive interview before this weekend’s World Bank meetings in Morocco, Akinwumi Adesina said there was a resurgence of belief in Africa’s economic prospects and attacked negative stereotyping, adding that there was “every reason to be optimistic”.
Continue reading...At the fund’s annual meeting this week in Morocco, ambitions for climate and debt relief may be overwhelmed by events – again
Last week’s turmoil in the global bond markets will be playing on the minds of finance ministers and central bank governors when they gather in Marrakech this week for the annual meetings of the International Monetary Fund and the World Bank.
After the triple shocks of the Covid pandemic, the war in Ukraine and the surge in inflation, the mood may be less febrile than it was a year ago, but few if any of those travelling to Morocco – which suffered a devastating earthquake last month – would dare say that the crisis era is over. Most will be wondering what might go wrong next.
Continue reading...Tanzania government blamed for violence against villagers in national park, while thousands more people face losing their homes
The World Bank is investigating allegations of killings, rape and forced evictions made by villagers living near the site of a proposed tourism project it is funding in Tanzania.
The bank has been accused of “enabling” alleged violence by the Tanzanian government to make way for a $150m (£123m) project ministers say will protect the environment and attract more tourists to Ruaha national park.
Continue reading...There are concerns the World Bank and ADB are giving contracts to low-price bidders who then demand more when budgets blow out
The Australian government has told big development banks to “lift their game” in the Pacific amid concerns they are approving poor-quality, cut-price projects only for the budgets to blow out.
Largely funded by governments, development banks provide grants and low-cost loans to developing countries to help them build infrastructure and other projects.
Continue reading...Changes to the World Bank could unlock developing states access to loans and to the means of staving off disaster
The Netherlands has almost the same amount of solar generating capacity as the whole continent of Africa. That must be, in part, because the interest on a loan to set up a windfarm in Africa is about 17% more than one to do the same in Europe.
Many poor countries enjoy vast natural resources of wind and sun yet struggle to access renewable energy because of the crippling cost of capital imposed on them. Private sector companies perceive far greater risk in poor countries, penalising most heavily the countries in greatest need of investment.
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