Albania graduated from IDA to IBRD

End of June marked Albania’s official graduation from IDA to IBRD. On this occasion, Camille Nuamah, Country Manager for Albania, gave an interview to journalists during a media tour.

The World Bank considers this a success story for our IDA lending because in just under two decades Albania has managed to advance from a low to middle income country with good progress on poverty reduction and a sound foundation for continued growth and development. Albania made this transition from IDA to IBRD at a time when the World Bank commercial lending is becoming cheaper and with longer maturities. We quite are proud to have been able to assist the country to reach this level of development at this point.”

Once a country achieves a level of middle income, has a level of good income, that has a level of good public financing and good public financial management, The Bank considers it a good challenge for the country to move from IDA to IBRD, to the part of  the bank’s loan that are based on commercial financing. For IBRD the Bank raises the money from the international capital markets like any other bank. But because of our very good credit rate we raise it at very low interest rates and we are able to lend to the countries at low rates and pretty good maturities as well. This is actually a very important time for Albania to graduate because the World Bank this year made its commercial lending even cheaper and also with longer maturities. So it’s a very good time for Albania to be doing this transition. And we are quite are proud to have been able to assist the country to reach this level of development at this point.

Are there risks? Of course, as you know, there is always a risk when even a person goes from receiving pocket money from the parents to getting their first credit card. But we are trying to support the government in public financial management, as well as debt management, which is a very important thing that needs to be done carefully at this moment. There is an added risk, because Albania has also at the same time gotten access to the international capital market itself. So the government will have to think very carefully and be very careful and strategic about how it begins to use those new resources. That’s said, at the same time, during the current process of EU accession, you get access to more grants. So the balancing of the sort of sources semi-commercial financing from the places like the bank with the grants and international capital markets, I think is a very good blend for Albania to continue to transition carefully in its public financial management.