Global financial institutions unveil multibillion dollar plan to address food security in developing countries

GLOBAL – International finance institutions led by the World Bank have unveiled a new action plan aimed at addressing food security, particularly in developing countries.

The move comes at a time when Russia’s war against Ukraine has exacerbated the issue of food security for people around the world, those in emerging and developing countries being the worst hit.

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Commodity prices were already on an upward path before Russia invaded Ukraine in February as most of the world started to emerge from Covid-19, with producers struggling to meet the renewed demand.

The mismatch inflated global food prices and pushed up agricultural inputs such as fertiliser, before the conflict all but cut off supplies of wheat, sunflower oil and barley from Ukraine and Russia.

To prevent further worsening of the situation, international financial institutions led by the World Bank have hatched what they describe as an Action Plan to foster food security.

Institutions backing the plan include the Asian Development Bank (ADB); the African Development Bank (AfDB); the European Bank for Reconstruction and Development (EBRD).

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The International Fund for Agricultural Development (IFAD); the Inter-American Development Bank (IDB); and the International Monetary Fund (IMF) are also part of the food security initiative.

The World Bank is mobilising over US$1.9 billion to support food security initiatives while the EBRD has pledged EUR2bn (US$2.1bn) to support Ukraine and nearby countries over two years, including EUR500m to support trade finance for agricultural and food products.

The World Bank is also leading the financial pledges, with a global initiative to provide US$30bn over the next 15 months for projects linked with “food and nutrition security”.

As part of the African Emergency Food Production Facility, a proposed US$1.5bn fund, the AfDB will deliver climate-smart, certified seed, fertiliser and extension services to 20 million farmers.

The bank also plans to provide financing support for large-scale procurement of fertiliser to African countries through wholesalers and credit guarantees.

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Meanwhile, The ADB has pledged US$200m to Afghanistan for essential food and is working with the World Food Programme (WFP) and the United Nations’ Food and Agriculture Organization (FAO) to address severe food insecurity.

Under the global Action Plan, the IFAD plans to invest US$3.5bn over the next three years in 78 countries.

The funds will support initiatives aimed at building the resilience of the world’s poorest and most vulnerable rural people to current global challenges, including the Ukraine crisis and other food-system shocks.

In conjunction with the other institutions, the IMF has committed to support countries affected by food insecurity with the full range of its instruments including advice, development assistance and financial support.

Financial commitments by the major international financial institutions come as the WFP projects that 323 million people will be food insecure in 2022.

Such a radical and unprecedented financial support could therefore prove useful in helping developing nations feed their people, averting potential food security crisis.

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