Scaling Up Aid to Africa The Africa Catalytic Growth Fund (ACGF) was launched in March 2006 to provide rapid, targeted support to countries with credible programs to accelerate growth, poverty reduction, and attainment of the Millennium Development Goals (MDGs). The fund is designed to complement efforts by African leaders and Africa’s international partners to respond to the diversity of experience across the continent, using an innovative approach. The ACGF can be a key tool for scaling up aid, in a harmonized and effective way. The ACGF is highly selective, focusing on a few countries at a time where an infusion of capital can scale up the achievement of results by supporting results focused programs, catalyzing efforts by developing partners, and identifying opportunities for demonstrable impacts and spillover effects. The United Kingdom is the first donor to support the ACGF with funding of £200 million. Additional donors have expressed interest in contributing to the ACGF. Targeting Resources and Achieving Results The Fund targets countries and investments that can deliver results. There are three categories of entry points for accessing ACGF funds. High performing countries that can achieve higher growth rates and become regional “star players” by breaking a binding constraint to growth or reinforcing new export opportunities. Success in these cases would directly benefit neighboring countries in two ways: (a) growth externalities from fast-growing neighbors can substantially help landlocked, resource-scarce countries and (b) demonstration to other African states that growth acceleration is possible - with strong leadership coupled with substantial international support. High performers could be provided with a large temporary increase in aid, enabling them to solve immediate problems that present barriers to their development: Examples include increasing reliability of energy supply, or lowering costs through key transport corridors. Transformation countries that can demonstrate recent and sustained commitment to reform based on strong political leadership, in countries that lack the capacity and resources to implement critical reforms. Success in these cases would motivate other countries to emulate improved economic governance leading to increased growth and poverty reduction. These countries can be provided with technical and financial assistance to lay the basis for sustained growth and help mdeliver hard to reach MDGs. Regional Integration initiatives that can increase the supply of mult-country public goods or deliver growth opportunities. This is an area of great strategic need for Africa due to its large number of land locked resources, poor economies and cross border issues. Success in these cases would address multi-country shared constraints to growth, bring together fragmented investments, and missed opportunities in a regional context. Regional integration funding can be provided to participating countries or to regional institutions.
Enhancing IDA Support The ACGF targets opportunities beyond those that can be supported by IDA. The Fund is intended to augment the impact of IDA assistance in a way that allows for flexibility to target support in a selective, systematic manner. Whereas an expansion of finance for IDA offers the prospect of incremental improvements in many countries based on demonstrated performance, the ACGF is intended to facilitate transformational change ina few countries at a time. The ACGF: Enhances, does not replace, the IDA funding structure and objectives by maintaining country ownership and an integrated expenditure management system. Facilitates incipient transformational change in just a few countries at a time, through rapid and concentrated fund provision. Maintains IDA quality while using simplified and targeted IDA processes.
Additional Information on the ACGF can be obtained through the Office of the Chief Economist, Africa Region, World Bank. Please contact John Page, Chief Economist (jpage@ worldbank.org) or Elizabeth M. White, ACGF Program Manager, (ewhite1@worldbank.org, 202 473 7065). |
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