US$3.8 billion, that’s how much
the UN’s International Fund for Agricultural Development (IFAD) will now be able
to invest in the world’s rural poor. This, thanks to an unprecedented
record-high financing target set today by governments from 177 countries at
IFAD’s annual Governing Council.
At a time when many nations are facing severe economic challenges, this move
demonstrates the importance global leaders place on investing in effective
long-term rural development as critical to achieving the Sustainable Development
Goals. This strong vote of confidence significantly boosts IFAD’s capacity to
address the devastating socio-economic impacts of COVID-19 and climate change.
With this unprecedented funding, IFAD will reach approximately 140 million
people in the world’s most fragile and remote areas over three years.
When combined with an expansion of IFAD’s pioneering climate change adaptation
programme (ASAP+), a new private sector financing programme, and cofinancing by
national and international partners, IFAD aims to deliver a total programme of
work of at least $11 billion from 2022-2024.
“Today our Member States made it clear that the fate of the poor and hungry
matters. All of us are united in our battle against the impacts of COVID-19 and
a rapidly changing climate – but none feel the impacts more profoundly than
rural people in the world’s poorest countries,” said Gilbert F. Houngbo,
President of IFAD.
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Gilbert F. Houngbo, President of IFAD |
“It costs less to invest
in sustainability and building long-term resilience to shocks than it does to
respond to repeated humanitarian emergencies. That is why the Sustainable
Development Goals exist, and this increased commitment to IFAD is an important
step to delivering on them. The contributions pledged so far show our Member
States are determined to eradicate poverty and hunger, and are confident in the
impact of IFAD’s work,” added Houngbo.
Already, 67 countries have announced new pledges totalling more than $1.1
billion in support of IFAD’s Twelfth Replenishment (IFAD12), a process whereby
Member States define strategic priorities and commit funds to the organization
for its work in 2022-2024. More pledges are expected throughout 2021.
In a strong show of support, the governments of Germany and France issued a
joint statement that said, “As IFAD12 is both ambitious and necessary to address
rural poverty at this critical time, the German government and the French
government have both decided to significantly increase their financial support
to IFAD to an all-time-high. We urge all Member States to join us in making an
ambitious contribution.”
IFAD is unique among international financial institutions in the high number of
Member States - usually more than 100 – that contribute voluntarily to its core
funding. This includes some of the world’s poorest countries, who were among the
first to announce significantly increased pledges last year, highlighting the
value they place on their partnership with IFAD, and putting pressure on
traditional donors to step up.
Many of IFAD’s top donors have announced their intentions to contribute
significantly more than their previous funding. The United States, historically
IFAD’s largest donor, committed $129 million which represents a 43 per cent
increase on its previous level of funding. A statement issued by the country
emphasized IFAD’s role as “an effective partner to bring donors together in a
multilateral setting to deliver rural poverty impact for the poorest.”
Increased pledges were also announced by France ($106 million – an additional 50
per cent), Italy ($96 million – an additional 45 per cent), Sweden ($87.3
million – equivalent to an additional 60 per cent in Swedish krona) and Ireland
($14.3 million – an additional 66 per cent), amongst others. Finland and Norway
also increased their core pledges by 40 per cent in national currency, and
Germany, China, the Netherlands, Japan and Canada made significant pledges of
$101 million, $85 million, $82.9 million, $57.3 million, and $55.5 million
respectively.
Other countries, including Cambodia, Lao People's Democratic Republic,
Madagascar, Mauritania, Pakistan, and The Philippines also announced higher
contributions, joining those who pledged significant increases last year,
including Burkina Faso, Côte d’Ivoire, The Gambia, Greece, Luxembourg, Mali, São
Tomé and Principe, Sierra Leone and Uganda. Contributing for the first time
since 2013, Haiti announced a pledge of more than double its last contribution,
while Somalia announced its first commitment in three decades.
As part of the IFAD12 process, Member States agreed to fund a reformed Debt
Sustainability Framework to ensure that debt-burdened countries can continue to
receive grant financing from IFAD.
In addition, they agreed that at least half of the funding received will support
rural development projects in sub-Saharan Africa, and more than a quarter will
be channelled to countries facing conflict or other fragile situations.
At least 40 per cent will be invested in addressing climate challenges,
contributing to achieving the Paris Agreement and ensuring more climate finance
reaches small-scale farmers. Investing in youth and rural job creation will also
be a key priority.
IFAD’s people-centred approach to rural development fosters “growth from below”
with investments at community-level in small and medium enterprises, small-scale
producers and the rural non-farm economy. These grassroots investments are
proven to promote prosperity, food security and resilience to extreme weather
changes, natural disasters, price hikes and other shocks like the COVID-19
pandemic that can later lead to humanitarian crises.
From 2022, IFAD will implement a strengthened business model which embeds the
lessons learned from the COVID-19 pandemic to ensure that IFAD’s investments
help rural people to sustain progress achieved, and build back stronger and more
resilient livelihoods from this and other future shocks.
Release: International
Fund for Agricultural Development (IFAD), Rome, Italy