International Development Association has said that it is providing support to some businesses hardest hit by the COVID-19 pandemic. The World Bank Group in its new report said “In Bangladesh, Côte d’Ivoire, Nigeria, and Rwanda, the IDA PSW is providing support to some of the businesses hardest hit by the COVID-19 pandemic. Through IFC’s COVID-19 working capital solution program, IDA PSW is helping to make working capital loans available to small and medium-sized enterprises in critical need of additional short-term liquidity to continue operating during the pandemic”. It said that “as global financial conditions tighten, the role of the World Bank Group remains critical to support the resilience and growth of the private sector, particularly in terms of preventing the loss of jobs and continuing to supply much-needed goods and services. Deepening the World Bank Group’s impact, the IDA PSW is helping to re-balance the risk and reward of private sector investments that offer major development impact in the poorest and most vulnerable countries”.
Samuel Munzele Maimbo, Director of IDA Mobilisation and IBRD Corporate Finance at the World Bank said “due to the COVID-19 pandemic, we’ve lost about a decade of improvements in living standards in the poorest and most fragile countries, the IDA PSW plays a pivotal role when it comes to making room for private sector solutions that keep businesses open and help preserve jobs and livelihoods.”
According to the World Bank, “as part of the Group’s COVID-19 crisis response, IFC, the largest global development institution focused on the private sector in emerging markets, made available $8billion to support their client companies that have been hurt by the economic downturn. However, many of these clients operate in high-risk environments. That’s where the IDA PSW comes into the picture. This essential tool provides funding to help de-risk IFC investments and guarantees from the Multilateral Investment Guarantee Agency in lower income and fragile countries.
The IDA PSW is playing in an important role in extending IFC’s crisis response in these countries.
“In Uganda, support from IFC and the IDA PSW is ensuring that the country’s second largest healthcare provider remains operational. The $4 million IFC loan will help the International Medical Group, which includes the largest private hospital in Uganda and 17 clinics, to address significant cash-flow constraints and provide the necessary flexibility to maintain business operations throughout the pandemic. This support will ensure that the range of services, including the not-for-profit services for lower-income patients, will continue to be available to patients across the country.
IDA PSW support is helping to ensure that diagnostic services remain available across Sub-Saharan Africa. An IFC loan, with support from the IDA PSW, to a network of diagnostic laboratories is crowding in other investors and making it possible for Cerba Lancet Africa to expand patients’ access to diagnostic health tests, improve test quality, and reduce testing costs in a number of IDA PSW fragile and conflict-affected states.
“The private sector has an important role to play in helping countries overcome the global coronavirus (COVID-19) pandemic. Governments in the poorest and most fragile countries have limited fiscal space to help their citizens cope with the impact of the pandemic. And, with weak health systems, a greater dependency on food imports, and informal economies with limited steady jobs, these countries already face an uphill battle in protecting the health and livelihoods of their citizens. The International Development Association (IDA)—the part of the World Bank that works with the poorest and most fragile countries—is using its Private sector window to help mitigate these impacts by providing concessional financing to help companies keep their doors open. In recent years, blended concessional finance has been helping open new markets and extend development impact. In this period of extreme uncertainty, the IDA PSW is using this financing tool to preserve hard-won development gains. By extending financing through the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA) to support continued economic activity in fragile markets, the IDA PSW is helping companies continue their operations during these difficult times”.