Africa: a challenge for the World Bank and the IMF

On the map of the world of extreme poverty, Africa is in bright red. And this problem is likely to increase as the population grows in the coming decades.
The work of the International Monetary Fund (IMF) and the World Bank to combat this long-standing plague on this continent has had mixed results since its inception 75 years ago.

Today, the Bretton Woods institutions are simultaneously faced with the need for massive investments in these countries’ infrastructure, job creation to cope with the population explosion and the threat posed by climate change. in a region unable to bear the costs.

“In Africa, the problems are particularly visible”, summarizes David Malpass, President of the World Bank in an interview with AFP.

The most recent data from the institution show that extreme poverty, defined by people living with a maximum of $ 1.90 a day, has fallen sharply worldwide falling to 10% in 2015 against about 30% in 1990.

However, it continues to grow in sub-Saharan Africa, which was already four years ago, more than half of the extremely poor people.

Projections show that by 2030, nearly 9 out of 10 people living in extreme poverty will come from this part of the world, while the population of the continent will grow at the same time by 1.3 billion, or more than half of the world’s population growth.

For 2019, the IMF expects a growth of 3.5% of GDP for this part of the world, against 3% in 2018. But the expansion recorded on average in recent years remains insufficient to create the 20 million jobs that would be each year to absorb new entrants into the labor market, warned the Fund in April.

Africa’s working-age population is projected to grow from 705 million in 2018 to almost one billion by 2030, according to the African Development Bank (AfDB).

Upon his arrival in April, David Malpass emphasized the urgency of tackling poverty. And it was symbolically in Madagascar, Ethiopia and Mozambique that he then surrendered.

There are still 700 million people living in extreme poverty: “700 million too many,” he lamented.

The former US Under Secretary of the Treasury, who has openly criticized the World Bank while still working under the Trump Administration, has set itself the goal of improving the effectiveness of the institution.

For African countries with heavy debt inherited from the mistakes of the past, he intends to encourage “good policies”, “a key element” to attract private investment.

For Masood Ahmed, who has worked for the IMF and the World Bank for a long time, the development of Africa is all the more difficult because it is weakened by climate change.

“In the next 20 years, the global economy will be twice as big as it is today, and the infrastructure we need to support this economy will have to double,” he said. AFP.

Projects will have to be carried out while reducing greenhouse gas emissions by a third.

Gary Ivenchuck

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Gary Ivenchuck