Accessibility links

Islamic Bank Seeks to Fight Poverty in Africa

  • Uma Ramiah

The Saudi-based Islamic Development Bank is trying to help the most impoverished member countries of the Organization of the Islamic Conference, which held a summit last week in Senegal. Most of the poorer countries of the group are in Africa. Uma Ramiah reports from Dakar initiation and fundraising for the bank's Islamic Solidarity Fund for Development remain challenging.

The Islamic Development Bank took on a leading role in fighting poverty in sub-Saharan Africa with the creation of the Islamic Solidarity Fund for Development two years ago.

Ahmed Ali has been president of the IDB since its creation in 1975.

"Half of the membership of the IDB are in Africa. Because IDB gives priority to the least developed member countries, they get the most attention from the Islamic Development Bank," he said.

Seeking a total contribution of $10 billion from member countries, the Islamic Solidarity Fund is specifically aimed at combating poverty in the poorest members of the Organization of the Islamic Conference.

Ali says the bank has generally focused on development, but the new fund will focus on poverty reduction.

"The main purpose of IDB is really to enhance the cooperation of its member countries in their efforts for economic development and social progress," he said. "IDB really concentrates on human development. But for special circumstances for African countries, there are other priorities for water, for health, as well as roads for landlocked countries such as Mali, Burkina Faso, Chad and Niger."

He attended the OIC conference last week in Dakar, and says though the fund stands at $2.6 billion, he remains optimistic this figure will soon increase.

"Until now, about $2.6 billion have been located for this fund and we are contacting our member countries for this fund .... During the summit in Dakar a number of member countries informed me personally that they are in the process of completing their internal procedures to announce their contribution to the fund. There was a great support for the fund during the summit, especially from the chairman of the summit in Dakar, the president of Senegal. In strong words he supported the fund," said Ali.

During the OIC Summit, both Senegalese President Abdoulaye Wade and his foreign minister pushed for action by the OIC on the Islamic Solidarity Fund.

Speaking to media, both said they saw this fund as a chance for member countries to reach out and help those they called their Muslim brothers and sisters, especially in Africa. While donating to the fund is not a requirement, Ali says members states are expected to give what they can.

Ali expects to start projects soon. The new fund, he says, will help sub-Saharan countries reach the U.N. Millennium Development Goals by 2015.

"We must start immediately," said Ali. "The board met a few weeks ago to approve the first two programs, one for microfinancing and one for vocational training. Each will be in the size of $500 million. The fund will contribute $100 million, and we will mobilize the rest from member countries. We are identifying now actual projects especially in microfinancing and vocational training, because of the high percentage of unemployment of the youth in our member countries, especially for girls. So this is our major concern now for this fund."

The Islamic Development Bank also invests in infrastructure and development projects throughout the Muslim world. Loans given to member countries, in conformity with Islamic principles, are interest-free.

The bank has a total authorized capital of more than $45 billion. Its largest contributors and shareholders are Saudi Arabia, Kuwait, Libya, UAE, Turkey, Egypt and Iran.

Headquartered in Jeddah, the Islamic Development Bank celebrated its 34th birthday this year. Many consider it the "World Bank" of the Muslim populace. It holds observer status to the United Nations General Assembly and some of its membership make up the wealthiest countries in the world. But of its 56 members, almost half are impoverished sub-Saharan African countries.

XS
SM
MD
LG