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By Jordan Teague
Over the last year, Bread for the World has talked a lot about the World Bank’s International Development Association (IDA) and why it is important to ending global hunger. IDA is the Bank’s fund for the lowest-income countries around the world. Regardless of region, it offers grants, low-interest loans, and other “concessional” financing (below market rates) to support economic growth and development. IDA just completed negotiations with its donor nations to replenish its funds. Bread for the World and its partners won an historic $93 billion in financing for IDA for the next three years, and advocates expect an increased U.S. contribution. This will enable IDA to continue to provide resources to countries for their efforts to reduce hunger, malnutrition, and poverty.
Now, in 2022, we turn our attention to financing for a regional development bank, the African Development Bank, and its fund for the 38 lowest-income countries on the continent, the African Development Fund. AfDF provides development financing exclusively to this group of African countries. It is funded by contributions from African countries and other countries, the United States among them. Much like IDA, AfDF relies on these contributions to continue to provide grants and make loans at low rates, including as many interest-free loans as possible. Without these low rates, lower-income countries risk accumulating very high debt levels; the interest alone can consume resources that are needed for people living with hunger and malnutrition.
What sets AfDF apart—and its parent organization, the African Development Bank Group, as well—is that it is an international financial institution founded by African countries for African countries. It is currently led by Dr. Akinwumi Adesina, an economist and agricultural development expert from Nigeria. The United States and other donors are supporting the Bank’s mission, which, as Dr. Adesina explains, center around the High 5s: Light Up and Power Africa; Feed Africa; Industrialize Africa; Integrate Africa; and Improve the Quality of Life for the People of Africa.
The Feed Africa plans include ensuring that, by 2025, an additional 150 million people have enough nutritious food and an additional 100 million are lifted out of poverty; also, that an additional 190 million hectares (about 470 million acres) are restored to agricultural productivity. This vision is aligned with the African Union’s goal of “completely eliminating hunger and food insecurity” by 2063. Together, they clearly illustrate the future that African institutions are working toward. U.S. support for the AfDF enables it to expand what Africans are already doing to reach the shared goal of ending hunger.
This year, as mentioned, is when AfDF needs to replenish its funds. The most recent three-year replenishment, the 15th since the Bank opened its doors, was in 2019, when 32 countries, including the United States, committed a total of $7.6 billion to AfDF for the three years 2019 to 2022. The United States committed $513.9 million that year, making it the AfDF’s third largest donor.
It is particularly important for donors to pledge robust funding for the 16th replenishment, which will help fight hunger and malnutrition on the Continent for the years 2022 to 2025. As Bread for the World has mentioned over the two years since the global COVID-19 pandemic began, lockdowns imposed to slow the transmission of the novel coronavirus carried economic consequences that fueled hunger and malnutrition. As most people can clearly recall, large parts of the global economy slowed to a near halt for months. Africa’s rising hunger rates are being fueled by slower economic recovery and rising public debt levels. Spiking coronavirus variants and the lowest vaccination rates of any region, due in part to low supply, are contributing to continued high levels of hunger. Africa’s lower-income countries are struggling to restart their economies and restore public services, including health care.
U.S. global food and nutrition assistance, which Bread for the World members advocate for each year, continues to reach African countries. But the needs are greater than the United States alone can meet. The better news is that every $1 in U.S. contributions to the AfDF helps the institution raise $11 more from other donor countries and global financial markets.
All of this means that when the U.S. Treasury Department leads our country’s negotiations to renew the AfDF’s funding, officials need to commit to a generous increase in funding. Too many lives are at stake not to do so.
Jordan Teague is interim director, policy analysis and coalition building, at Bread for the World.
U.S. support for the AfDF enables it to expand what Africans are already doing to reach the shared goal of ending hunger.
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