COVID-19 may push 60 million into extreme poverty ― World Bank

The World Bank has said that COVID-19 pandemic and the subsequent lockdown of economies could push 60 million people into extreme poverty.

The global financial institution said this in a statement issued on Tuesday.

According to the statement signed by World Bank President, David Malpass, “The pandemic and shutdown of advanced economies could push as many as 60 million people into extreme poverty – erasing much of the recent progress made in poverty alleviation.”

He added, “The World Bank Group has moved quickly and decisively to establish emergency response operations in 100 countries, with mechanisms that allow other donors to rapidly expand the programs. To return to growth, our goal must be rapid, flexible responses to tackle the health emergency, provide cash and other expandable support to protect the poor, maintain the private sector, and strengthen economic resilience and recovery.”

The World Bank stated further that it had since March “rapidly delivered record levels of support in order to help countries protect the poor and vulnerable, reinforce health systems, maintain the private sector, and bolster economic recovery. This assistance, the largest and fastest crisis response in the Bank Group’s history, marks a milestone in implementing the Bank Group’s pledge to make available $160 billion in grants and financial support over a 15-month period to help developing countries respond to the health, social and economic impacts of COVID-19 and the economic shutdown in advanced countries.”

The bank added that it would support the beneficiary countries with grants, loans and equity investments which would be supplemented by the suspension of bilateral debt service, as endorsed by its governors.

According to Malpass, “The bilateral debt-service suspension being offered will free up crucial resources for IDA countries to fund emergency responses to COVID-19. Nations should move quickly to substantially increase the transparency of all their governments’ financial commitments. This will increase the confidence in the investment climate and encourage more beneficial debt and investment in the future.”

World Bank said its intervention would strengthen health systems, support the poorest households, and create supportive conditions to maintain livelihoods and jobs for those hit hardest.

The Bretton Woods institution said its country operations would deliver help to the poorest families through cash transfers and job support; maintain food security, nutrition and continuity of essential services such as clean water and education; target the most vulnerable groups, including women and forcibly displaced communities, who are most likely to be hit hard; and engage communities to support vulnerable households and foster social cohesion.

“The scale and speed of the Bank Group’s response are critical in helping countries mitigate the adverse impacts of this crisis and prioritize the human capital investments that can accelerate recovery,” the statement said, adding that “Establishing and supporting efforts in fragile and conflict-affected situations is a priority, given the rapidly growing number of cases in some of these countries.

To demonstrate its determination to ensure a speedy recovery for the countries, the bank said “Disbursement is already underway on $20 million to Senegal and $35 million to Ghana, which includes funding to strengthen disease surveillance systems, public health laboratories, and epidemiological capacity for early detection. A $20 million IDA grant was approved for Haiti that aims to enhance testing, minimize spread through contact tracing of confirmed cases, and provide laboratory and protective equipment for health care staff.”

On its support for businesses, World Bank said, “The International Finance Corporation (IFC) continues to implement its $8 billion fast-track financing facility, which aims to keep companies in business and preserve jobs. Close to 300 clients have requested support, and the facility may be oversubscribed.

“Building on this effort and market demand, IFC aims to provide $47 billion in financing to developing countries over 15 months. Cumulative COVID-19 related commitments under IFC’s Global Trade Finance Program, which supports small and medium-sized enterprises involved in global supply chains, have totalled 1,200 transactions across 33 countries for $1.4 billion, with 51 per cent of this volume in low-income and fragile countries.”

 

 

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