The World Bank expects to boost the financing capacity of its middle-income lending arm by up to $50 billion over the next 10 years to help countries deal with overlapping crises, its president David Malpass said on Thursday in Niamey, Niger.
Mr Malpass said the increase in financing capacity for the International Bank for Reconstruction and Development (IBRD) would come during the meetings of the World Bank and the International Monetary Fund in Washington next month.
He said the World Bank had doubled its financing for global public goods during his presidency, reaching $100 billion from 2020-2022, and was continually exploring options to further increase its lending capacity.
In his remarks, Mr Malpass underscored his concerns about “unsustainable levels” of public debt in many developing countries, with precise amounts and terms often unknown due to non-disclosure clauses and collateralised debt deals.
More than half of the world’s poorest countries were in or at high risk of debt distress and their problems were mounting, given higher interest rates and inflation that were leading to capital shortages, he said.
As a result, governments needed to “plan for continued financial stress”, Mr Malpass said, calling for further efforts by developing countries to remove wasteful subsidies, improve public procurement and broaden their tax base — all steps need to attract urgently needed private sector capital.
The World Bank is also undertaking reforms — under pressure from the US and other key shareholders — to free up more resources to help developing countries deal with climate change and other challenges.
Mr Malpass gave no details on how the IBRD would increase its lending capacity in the speech in Niger.
He told Reuters last month the bank could change its internal lending guidelines to free up $4 billion in lending capacity for the IBRD each year, or $40 billion over 10 years, a sum that falls far short of recommendations made by an independent panel to the Group of 20 major economies last year.
The IBRD in December raised its sustainable annual lending limit by $2 billion, beginning in fiscal 2024. Its lending ceiling for fiscal 2022 was $37.5 billion.