This year, countries will announce their commitments to the 21st replenishment of the International Development Association (IDA). As traditional donors slash their development budgets, World Bank President Ajay Banga is asking for a record $30bn in pledges. Expanding IDA represents a unique opportunity for donors to re-establish trust with developing countries, particularly in Africa, and restore those countries’ commitment to the multilateral system.
In the context of low and declining trust between developed and developing countries, it is in donor countries’ strategic interest to make substantial new IDA contributions. Increasingly strained relationships with African states together with a brewing debt crisis are eroding faith in the multilateral system, endangering supply chains of critical raw materials, and opening the door for strategic rivals like Russia and China, while also diminishing the financial and geopolitical firepower of donor countries.
The 2024 IDA replenishment represents a highly efficient way for donor countries to demonstrate that they are listening to African leaders and to boost fiscal space for sustainable development. It could also be the first step of a broader “offer” on debt as part of wider financial architecture reform, greatly expanding access to concessional and grant financing for the poorest countries. The $30bn figure for IDA replenishment that Ajay Banga has requested in pledges would be a good start, and donors should take seriously the G20 Independent Expert Group’s call for a pathway to tripling IDA lending by 2030.
