The prospect of eradicating hunger and poverty received a boost today as the UN’s International Fund for Agricultural Development (IFAD) obtained its second strong public credit rating, facilitating its access to private funds to invest in increasing rural prosperity and development in the world’s poorest countries.
The AA+ rating was announced today by Standard and Poor’s (S&P) Global Ratings. This complements the AA+ Fitch rating that IFAD received on 2 October, when IFAD became the first fund in the United Nations system to receive a public credit rating.
“As hunger grows in rural areas, the demand for our services is greater than ever and we need to broaden our investor base as much as possible,” said Gilbert F. Houngbo, President of IFAD.
“With two positive ratings, we can mobilize more funds from various potential investors at a favourable cost. And this means we can do more to increase the incomes and food supply of the poor rural people who desperately need it. This is a prerequisite for building global stability and resilience.”
As the leading global development organization dedicated exclusively to eradicating poverty and hunger in rural areas, IFAD plays a critical role in achieving the Sustainable Development Goals (SDGs) by 2030.
The recently released Ceres2030 report found that an additional US$14 billion a year, on average, is needed until 2030 to end hunger and double the incomes of 545 million small-scale farmers. This means roughly doubling the amount of aid given for food security and nutrition each year.
IFAD has been exploring new funding models to help it double its impact on reducing poverty and hunger by 2030, and meet the changing needs of borrowing countries at a time when Official Development Assistance (ODA) is under severe pressure, and the economic impacts of COVID-19 threaten to push millions more rural people into hunger and poverty.
IFAD-supported projects and programmes are currently funded through contributions from its 177 Member States, investment income and reflows, as well as cofinancing from other sources.
“It is a new era and we need to keep pushing the boundaries of how we fund development,” said Houngbo. “This second rating strengthens the assessment of IFAD’s creditworthiness and allows us to develop a diversified, broader and more predictable funding base. By harnessing additional resources, we can stretch every dollar of taxpayer money we receive to ensure we reach the poorest of the poor.”
Due to the COVID-19 pandemic, there could be up to 132 million more hungry people in 2020 alone, and extreme poverty looks set to increase for the first time in decades. With only 10 years left to achieve the SDGs, there is an urgent need to increase investment in the rural areas where most of the world’s extremely poor and hungry people live, and where IFAD focuses its activities.