The International Bank for Reconstruction and Development (IBRD) is the lending arm of the World Bank Group for middle-income and “credit-worthy” low-income countries – meaning that not all countries can access it. It provides loans to countries at market-access rates, rather than concessional rates.
In 2024, a total of 20 African countries could access the IBRD. Of these 20, 14 African countries can access the IBRD-only, whilst a further 6 can borrow from both the IBRD and IDA – the concessional lending arm of the World Bank. Since 1950, a total of 37 African countries have been able to access IBRD resources, yet this has shifted over time.
Currently, access to IDA and IBRD is determined by stringent thresholds imposed on countries by the World Bank. To access IDA, countries must have per capita GDP below US$1,315 while IBRD-eligible countries exceed this threshold. However, the average poverty rate in IDA-eligible African countries is about 48%, and it is 30% for IBRD-eligible African countries meaning that many countries still grappling with poverty are locked out of access to much-needed concessional financing.
Therefore, many African countries cannot access IBRD resources at scale – with the continent accounting for just 11.7% of total IBRD disbursements since 1950, comparatively, Latin America and the Caribbean countries have accounted for 33.1%. In addition, African countries receive significantly smaller disbursement from the IBRD relative to countries in other regions, except for the Middle East. For instance, the average African country has received a total of USD 2 billion from the IBRD, compared to USD 7 billion for Latin America, USD 9.2 billion for East Asia, USD 3.3 billion for Europe/Central Asia and USD 16.4 billion for South Asia.
Moreover, in terms of the trends in annual access by African countries to IBRD, there has been significant fluctuation over the years – peaking at 72 times in 1991. However, since this peak, there has been a 90% decrease when compared to current 2024 levels, where African countries have only accessed 7 times (as of July 2024). There was a significant decline in the early 2000s during the HIPC period – highlighting the pro-cyclical nature of IBRD lending – which can negatively impact economic growth and macroeconomic stability.
The amount of finance and number of times African countries have accessed IBRD resources also varies amongst African countries. For example, most of the IBRD lending to Africa has gone to North African countries even as other countries of comparative economic size in other regions of the continent. In terms of volume, 12 African countries have borrowed over USD 1 billion from the IBRD. However, only four countries have borrowed from IBRD over 100 times – Morocco being the highest at 306, followed by Tunisia (235), Egypt (117) and Algeria (116).
These four countries also fall into the top 5 African countries who have received the largest amount of IBRD financing – again, Morocco comes in top at $19.9bn, followed by Egypt ($18.7bn), Tunisia ($10.3bn), Nigeria ($5.8 b, 89 times) and South Africa ($5.6bn).
However, the top 5 African borrowers from the IBRD, while accounting for almost 75% of total IBRD lending to Africa, account for a combined 8.5% of total IBRD lending. On the other end of the spectrum, 18 African countries have never borrowed from the IBRD.
So what does this show us? Overall, the threshold on access to IBRD (and IDA) constrains African countries in their access to cheaper sources of finance. Given the large amount of financing needs African countries face, the World Bank should tackle some of the perverse incentives and conditions of the IDA-IBRD system – including eliminating or increasing the thresholds, for IDA eligibility so that more African countries can access affordable, cheap finance.
The World Bank should also urgently increase the share of IBRD resources going to African countries by at least 50% with more equitable distribution across the different regions of the continent.
In addition, in pursuit of its mission to end global poverty, the World Bank should consider granting African countries access to both IBRD and IDA to increase the resources available to these countries to enable them to reduce poverty levels significantly.
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Acknowledgements: Special thanks go to Trevor Lwere, Kenean Wase and Jade Scarfe, for their work on the graphics, collecting/analysing the underlying data and sharing this accompanying article. The data was collated from the World Bank Group Finances Database. Our methodology is entirely in-house, based on analysis of economic growth, inflation and other trends.
