Development Effectiveness

“The (COVID) pandemic has significantly changed the global development landscape and in many cases rolled back the progress made in achieving the Sustainable Development Goals (SDGs) – Agenda 2030”

The COVID-19 pandemic is estimated to have increased extreme poverty in IsDB Member Countries (MCs) by about 51 million people between 2020 and 2021. The MC's progress toward the SDGs will likely stall. The low-income and fragile MCs particularly in Sub-Saharan Africa (SSA) will take longer to recover due to low vaccination rates and inadequate availability of resources. Global factors such as the resumption of the international supply chain, stability of commodity prices, and incidence of extreme climate events will be critical to the resumption of growth.

ICD in Action

Of the US$250mn pledged in 2020 to help its MCs deal with the impact of COVID-19, US$171mn has already been approved for financial institutions and the private sector through twelve Lines of Finance (LOF), and US$14.2mn was approved for two equity investments in Islamic Financial Institutions (IFIs) and industries related to healthcare and food. MCs in SSA and ECA regions have been the major recipients. ICD contributions helped extend support to the needy, shore up demand, and protect people’s livelihoods.

While approvals slowed from their 2020 levels due to the difficulties in planning and designing new projects in a pandemic situation in 2020, disbursements were up significantly as economic activities resumed in 2021. Private sector development particularly in the SMEs and critical industries remained the focus. The approvals were mainly in MCs in MENA, Asia, and Sub-Saharan Africa. As in previous years, in 2021, ICD’s approvals and disbursement portfolios were dominated by the finance sector which accounted for about 50 percent of total approvals and 62.3 percent of total disbursements.

The 2021 Annual Development Effectiveness Survey achieved a response rate of about 77 percent. It indicated that despite the constraints imposed by the pandemic, ICD achieved good results in sustaining and creating employment, especially in MSMEs, promoting Islamic finance, contributing to the financial well-being of its partners, and in sectors such as health, agriculture, and digital transformation. The survey also suggested that increasing the alignment of ICD’s partners with the SDGs and accelerating their rate of digital transformation remain a work in progress.

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2021 Development Effectiveness Survey Results

The 2021 annual Development Effectiveness Survey achieved a response rate of 76.5 percent. It indicated that despite the slowdown of the global economy and in the MCs, ICD managed to achieve relatively impressive results in sustaining and creating employment, especially in MSMEs, promoting Islamic finance, contributing to the financial well-being of its partners, and in sectors such as health, agriculture and digital transformation. The alignment of ICD’s partners with the SDGs also appears to be increasing.

ICD is committed to helping its MCs deal with uncertain and risky global scenarios. ICD’s 2022-2024 business plan concentrates on its core competency areas of contributing to inclusive human capital development, enhancing green economic growth, and building sustainable infrastructure consistent with the IsDB’s Strategy 2025, and its own ten-year strategy. 

ICD can play an important role in promoting the private sector and boosting COVID-19 response in line with its updated Development Effectiveness Policy (DEP). ICD will help its MCs achieve the SDGs, directly targeting SDGs 7,8, and 9 by providing access to financing for the small and medium-sized enterprises (SMEs) and infrastructure development as well as funding green development.

During 2022-24, ICD expects to support the creation of 147,633 new jobs, provide financing access to 25,500 micro, small and medium-sized enterprises (MSMEs), and enable access to Islamic Finance to 268,423 persons in its MCs.