Market News

(Bloomberg) -- Africa will be allocated 70% of the $100 billion that an arm of the World Bank has mobilized to provide affordable financing to the world’s poorest nations, which could help mitigate the impact of declining aid, one of the lender’s executives said.

“We have been very clear that the bank remains strongly committed to Africa,” Axel van Trotsenburg, the bank’s senior managing director, said in an interview in Addis Ababa, Ethiopia’s capital.

Preliminary data released by the Organization for Economic Cooperation and Development in April shows official development assistance provided to the continent by nations that make up its aid committee fell 1% to $42 billion last year. A further decline is anticipated after President Donald Trump cut US funding for many aid programs and European nations directed more money toward defense.

The World Bank’s International Development Association has deployed $290 billion toward upliftment projects over the past decade, with Africa the biggest recipient. While countries committed $24 billion toward replenishing the association’s funding last year, which would have enabled it to leverage a total of $100 billion in financing, some donors have since scaled back their pledges.

“Almost 45% of all our resources are going to Africa,” he said. “Over 70% of the concessional loans will go to Africa.”

The World Bank, through its International Finance Corp. unit, is also seeking to securitize loans to boost its lending capacity, with an initial $510 million deal secured last month. In addition it’s aiming to build on the success of last year’s debt-for-development swap in Ivory Coast, according to Van Trotsenburg.

hereNext Africa newsletter,AppleSpotify anywhere you listen

--With assistance from Antony Sguazzin.

(Corrects loan figure in fourth paragraph)