IFAD gets US$ 3.8bn to tackle COVID-19 and Climate Change

Half of funds will support rural development projects in sub-Saharan Africa

Kampala, Uganda | RONALD MUSOKE | The UN’s International Fund for Agricultural Development (IFAD) plans to invest up to US$ 3.8bn into the world’s rural population following the unprecedented financing target set during this year’s Governance Council Meeting held virtually on Feb.17-18.

The rural poor are currently grappling with the adverse effects of COVID-19 and climate change.

“…our member states (have) 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 Houngbo, the president of IFAD, the UN agency responsible for investing in rural people and empowering them to reduce poverty, increase food security, nutrition and strengthen resilience.

“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.”

Houngbo noted that with the unprecedented funding, IFAD will reach approximately 140 million people in the world’s most fragile and remote areas over the next three years.

IFAD has 177 members that contribute voluntarily to its core funding and so far, up to 67 countries have announced new pledges totaling more than US$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, including from some of the world’s poorest countries, which 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.

Speaking during the opening ceremony of the Governance Council meeting on Feb.17, world leaders noted that the world’s poorest and wealthiest nations are interconnected. Many argued that eradicating poverty and hunger will be impossible without urgent and focused international cooperation efforts directed at long-term development.

“The COVID-19 pandemic and the climate crisis should drive home the message to all – rich and poor, weak or powerful – that their destinies are intertwined. We will perish or survive together,” Imran Khan, the Prime Minister of Pakistan, told representatives of IFAD’s 177 member states. “We need a common plan and strategy for global recovery and the survival and prosperity of all humanity.”

Highlighting the long-term and profound economic damage the pandemic is now having in low-income countries where poverty and hunger are on the rise, João Manuel Gonçalves Lourenço, President of Angola, compared the challenges ahead to his country’s recovery from civil war.

“International cooperation, both bilateral and with development organizations, was crucial for our struggle for post-war reconstruction and it continues to be necessary so that together we can tackle the effects of the crises we are facing,” Lourenço said.

“My conviction remains intact. We can achieve a more fair and equitable world, a world without abject poverty, a world without hunger,” he said. “But the pandemic and the effects of climate change are forcing us to radically rethink the way we produce and eat.”

Fighting growing global hunger and poverty, the world leaders noted, needs to be addressed through global partnerships and greater long-term investments in the rural people who grow so much of the world’s food, but often are the poorest and hungriest.

 Donors respond to call

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 US$129 million which represents a 43% increase on its previous level of funding.

Increased pledges were also announced by France (US$106 million – an additional 50%), Italy (US$96 million – an additional 45%), Sweden (US$87.3 million – equivalent to an additional 60% in Swedish krona) and Ireland (US$14.3 million – an additional 66%), amongst others.

Finland and Norway also increased their core pledges by 40% in national currency, and Germany, China, the Netherlands, Japan and Canada made significant pledges of US$101 million, US$85 million, US$82.9 million, $57.3 million, and US$55.5 million respectively.

Other countries, including Cambodia, Laos, Madagascar, Mauritania, Pakistan, and The Philippines also announced higher contributions, joining those who pledged significant increases last year, including Burkina Faso, Ivory Coast, The Gambia, Greece, Luxembourg, Mali, São Tomé and Principe, Sierra Leone and Uganda.

There was consensus at the meeting 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.

About 40% 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 grassroot 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.