WB to triple loans to poor nations

World Bank lending to developing countries will triple to Sh7.7 trillion ($100 billion) by 2011.

Apart from the increased lending, the World Bank Group is also working to speed up grants and long-term, interest-free loans to the world’s 78 poorest countries, 39 of which are in Africa.

This follows the bank’s commitment ahead of a G20 summit this weekend to increase financial support for developing countries over the next three years driven by a desire to forestall severe effects of the global financial crisis.

This year, lending could almost triple to more than Sh2.7 trillion (US$35 billion) compared to Sh1.04 trillion ($13.5 billion) last year.

The additional finance will protect the poorest and most vulnerable from harm, prop up countries facing big budget shortfalls and help sustain long-term investments upon which recovery and long-term development will depend.

At the same time, the World Bank lowered its growth forecast for developing country economies to 4.5 per cent for 2009, compared to a previous projection of 6.4 per cent, due to a combination of financial turmoil, slower exports and weaker commodity prices.

It expects high-income country economies to contract by a tenth of a per cent next year while the world economy ekes out only one per cent growth.

“Leaders meeting on Saturday to discuss the global financial crisis must not lose sight of the human crisis. As always, it is the poorest and most vulnerable who are the hardest hit,” said WB Group President Robert Zoellick.

“The response to this crisis must be global, coordinated, flexible and fast. While the challenges need to be addressed at the country level, it is more critical than ever that the international community acts in a coordinated and supportive way to make each country’s task easier,” he added.