The World Bank is to raise its lending capacity to about $300 billion
Amid plans by the Federal Government to release the figures of the country’s newly rebased Gross Domestic Product, GDP, the World Bank on Tuesday classified Nigeria among the world’s five extreme poor countries.
Nigeria’s GDP is expected to be boosted based on a current nominal value of about $305 billion by 40 per cent, to 60 per cent, to surpass that of South Africa, which currently stands at $350 billion.
Analysts say the planned rebasing of the country’s GDP was to enable government come up with figures to support claims of the superlative performance of the country’s economy, said to be growing at about 6.5 to 7 per cent annually.
But, the pronouncement by the World Bank President appears to have removed the sail from government’s wind, as it highlighted the disconnect between government’s statistics and economic reality.
The World Bank President, Jim Yong Kim, who was addressing participants at the Council on Foreign Relations, CFR, meeting in New York, named India, China, Bangladesh, and the Democratic Republic of Congo as the other countries in the new global poverty categorization.
“The fact is that two-thirds of the world’s extreme poor are concentrated in just five countries – India, China, Nigeria, Bangladesh, and the Democratic Republic of Congo,” he said.
“If you add another five countries — Indonesia, Pakistan, Tanzania, Ethiopia, and Kenya – the total grows to 80 percent of the extreme poor.”
Mr. Kim, who defined extreme poverty as “people living on less than $1.25 a day”, said “more than a billion people in the world live on less than that each day.”
The World Bank President, who unfolded lending proposals to support efforts to end the world’s extreme poverty, said special focus needed to be on these countries as part of the strategy to realize the Bank’s target of ending extreme poverty by 2030.
Reviewing the effort to tackle poverty, Mr. Kim said in the past 20 years, the world was able to lift roughly 35 million people out of poverty every year.
He said if the World Bank is to reach its goal of ending extreme poverty by 2030, the challenge would be to help at least 50 million people lift themselves out of poverty every year.
To end extreme poverty by 2030, Mr. Kim estimates that about $125 billion would be needed annually in official development assistance, and foreign aid, with about $100 billion going into the provision for Africa’s infrastructure needs alone every year.
In addition, he said the BRICS countries, namely Brazil, Russia, India China, and South Africa have need for about a $1trillion for infrastructure development every year.
Acknowledging that the world’s fundamental problems affect several billions of people, Mr. Kim said almost two billion people lack access to energy, apart from an estimated 2.5 billion others who lack access to financial services.
He said about seven billion of the world’s population face impending disaster from climate change if nothing is done immediately to tackle the challenge.
Noting the challenge posed by corruption, Mr. Kim said the World Bank would continue to extend its support to those places corruption thrives in the absence of support from other places.
“The governance issues are real,” he said. “Corruption is a very real issue. So we’ve got to fight corruption, and we’ve got to do everything we can to try to help specific countries improve on their governance.”
On specific efforts of the bank to tackle the scourge of global poverty, he said the bank has been trying to go to areas where the private sector dread to venture into
Through its Global Practices programme, he said the World Bank would deploy communities of experts to tackle common issues in 14 areas, including water, health, finance, agriculture, and energy.
He announced the decision of the bank to almost double its annual lending capacity to middle-income countries from $15 billion to as much as $28 billion a year.
“This means that the World Bank’s lending capacity, or the amount of loans we carry on our balance sheet, will increase by $100 billion in the next decade to roughly $300 billion,” the President said.
The World Bank Group’s annual commitment is expected to grow from an average of $45 to 50 billion to more than $70 billion in the coming years, while proposing a saving of $400 million in the next three years.
This, he said, would not include about $52 billion in grants and concessional loans from International Development Agency, IDA, in December 2013 for the poorest countries.
Besides, he said the Bank is also increasing its direct support to the private sector, with its Multilateral Investment Guarantee Agency, MIGA, planning to increase its new guarantees by nearly 50 percent over the next four years.
Similarly, he said the International Finance Corporation, IFC, is expected to almost double its portfolio over the next decade to $90 billion, while new annual commitments would increase to $26 billion a year within the next decade.