Clara Nwachukwu
The World Bank Group (WBG) says its entities have committed $84.3 billion into COVID-19 responses around the world in the 2021 fiscal year (FY21), 15% higher than FY20.
The pandemic, which brought the global economy to a halt in 2020, necessitated urgent interventions to manage the impact, such that a significant portion of the FY21 commitments supported measures related to the health and economic impacts of COVID-19.
This followed strong demand for financing from member countries to stabilize economic conditions due to the global virus outbreak and increased poverty.
Details of this and other financial commitments are contained in the audited financial statements for FY21 (July 1, 2020 – June 30, 2021), which was approved by the Executive Boards of the WBG on August 5.
In a statement on Monday announcing the release financial statements, which highlighted the strength of the financial position of its entities, the Group said the responses included $4.7 billion of newly approved financing for vaccines benefiting 54 countries.
“World Bank Group support to client countries surged to $157 billion over the last 15 months to address increased poverty, inequality, and the impacts of COVID-19,” said World Bank Group President David Malpass. “This unprecedented level of commitments helped countries strengthen health systems, protect the poor and vulnerable, support jobs and businesses, promote economic growth, and lay the foundation for a green, resilient and inclusive recovery.”
Accordingly, a significant portion of the FY21 commitments of each of the entities in the WBG – the International Bank for Reconstruction and Development (IBRD); the International Development Association (IDA); the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA), supported COVID-19 related efforts.
Their operational response focused on three stages:
- Relief stage that involves emergency response to the health threat,
- Restructuring stage that focuses on strengthening health systems, restoring human capital, and restructuring of firms and sectors, and
- Resilient recovery stage that entails new opportunities to build a more sustainable, inclusive and resilient future.
“Each stage is structured through four thematic crisis response pillars: Saving lives; Protecting the poor and vulnerable; Ensuring sustainable business growth and job creation; and Strengthening policies, institutions, and investments for rebuilding better,” the report said.
Entities responses
Specifically, in its FY21 report the International Bank for Reconstruction and Development (IBRD), which provides loans and advice to middle-income countries, said in response to the global outbreak of the coronavirus disease and to support global public goods, it has been working in solidarity with partners at global and country levels to support its borrowing countries.
For IDA, the World Bank’s fund for the poorest, FY21 was the first year of the implementation of the Nineteenth Replenishment (IDA19) and coincided with the onset of the COVID-19 crisis.
To enable IDA to continue meeting the heightened financing needs for IDA resources, in April 2021 IDA members agreed to launch the Twentieth IDA replenishment (IDA20), one year earlier, in FY23.
In FY21, IDA net commitments were $36.0 billion, 19% higher than the previous year. Net disbursements in FY21 were $16.5 billion, a 9% increase compared to the previous year, increasing the net outstanding loan balance to $177.8 billion, a 10% increase over FY20.
This unprecedented level of commitments helped countries strengthen health systems, protect the poor and vulnerable, support jobs and businesses, promote economic growth, and lay the foundation for a green, resilient and inclusive recovery.
Similarly, IFC, the Bank Group’s private sector arm, in March 2020, its Board of Directors approved a Fast Track COVID-19 Facility (COVID Facility) totalling $8 billion, as part of a WBG crisis response package. In February 2021, the Board also approved an extension of the COVID Facility dedicated to the Base of the Pyramid Program for $400 million. Under the COVID Facility, IFC committed $2.3 billion and $3.5 billion in FY21 and FY20 respectively.
“Beyond this immediate response, IFC has been working with countries to restructure and promote a recovery that is sustainable, inclusive, and climate-smart. This means directly helping firms become more resilient — to survive, bounce back, and accelerate their post-crisis recovery to bring back jobs and livelihoods.
“In FY21, IFC has committed an additional $8.5 billion in financing outside of the COVID Facility to support clients in response to the crisis, and $1.6 billion in FY20,” its report stated.
Finally, for MIGA, whose mandate is to help drive impactful foreign direct investment to developing countries, its commitments totalled $5.2 billion in FY21, and include $3.5 billion of guarantees under the Agency’s COVID-19 Response Fast-track Facility to support private sector investors and lenders in emerging economies and developing countries to address the impacts of the pandemic.
