Parliament approves Egypt share increase in IBRD capital stock
Egyptian parliament’s economic committee approved on Sunday a presidential decree to increase Egypt’s authorized share in the International Bank for Reconstruction and Development’s (IBRD) capital stock.
The total increase of the World Bank’s authorized capital stands at $200 million, with Egypt’s share of this increase representing about 26 percent, of which 6 percent is down payment paid, with the remainder on installments over 5 years, Egypt Independent reported citing a government representative.
The total optional increase stands at approximately $149 million.
In April 2018, the World Bank’s shareholders endorsed a $13 billion paid-in capital increase, part of a series of internal reforms, and other policy measures. It said in a statement that these reforms and measures would “greatly strengthen the global poverty fighting institution’s ability to scale up resources and deliver on its mission in areas of the world that need the most assistance,”
The package, approved by the Development Committee of the Board of Governors, comprises of $7.5 billion paid-in capital for IBRD and $5.5 billion paid-in capital for International Finance Corporation (IFC). This is through both general and selective capital increases, as well as a $52.6 billion callable capital increase for IBRD.
The boost in capital was offset by various reforms, which will involve operational changes and effectiveness reforms, loan pricing measures, and other policy steps to create a stronger World Bank Group.
The World Bank also agreed in 2018 to alter IBRD’s lending rules to charge higher rates for developing countries with higher incomes, in order to discourage them from “excessive” borrowing, according to Reuters, which impacted costs for higher-middle-income countries such as China.
The multilateral lender said at the time that the plan would lead to a rise in the group’s overall lending to nearly $80 billion in fiscal 2019 from about $59 billion in 2018, Reuters added.
The last World Bank capital hike took place in 2010.
Founded in 1944, IBRD is a development bank administered by the World Bank Group. It offers financial products and policy advice to countries aiming to reduce poverty and promote sustainable development.
These institutions work together in more than 100 countries, provide financing, financial guidance, and other solutions enabling countries to address challenges associated with development.
Source: Egypt Independent