Washington DC I African states formed a unified position on World Bank reforms that centers their needs on fighting poverty and hunger and pushes back against the more narrow demands of wealthy Western shareholders that focus on climate change and pandemics.
A document, agreed upon by consensus and representing the common position of African states, argues that food security, water, and affordable energy are “global public goods,” and lays out concerns about financing the digital transformation. It was issued ahead of the 20 leading rich and developing nations, or G20, finance ministers’ meeting in India coming up next week.
The move is the latest by African governments to gain more control over the reform process, which has been dominated by the likes of United States Treasury Secretary Janet Yellen. She has been laboring this year to create buy-in among lower-income nations for the efforts to use the Washington-based lender to tackle environmental concerns and global health.
“For African countries, we need to reinforce the message on global public goods to ensure that their needs, priorities and realities are taken on board. Development is also a priority for Africa,” said Abdoul Salam Bello, an executive director at the bank from Niger, who represents a bloc of states from the continent on the board of the lender.
“This is part of the ongoing discussions on the World Bank Group reform,” Bello told Devex from Cape Verde, which is hosting a conference that produced the paper. The paper has not previously been reported.
A senior Treasury official told reporters that reforming the multilateral development banks is a top priority for Yellen at the G20, as she hopes optimization efforts will allow the institutions to lend an additional $200 billion over the next 10 years. The World Bank this year already identified $50 billion.
Even so, those numbers fall far short of overall needs, raising the question of where additional finance will come from, especially if the bank is tasked with eliminating extreme poverty and boosting equality as well as taking on additional roles. New World Bank President Ajay Banga has pledged to mobilize more private capital, but previous attempts by development banks have had middling results.
Also read:
- Why Maputo Protocol is still a ‘mixed feeling’ for the African girls and women
- Why Chinese Amb to Tanzania, Mingjian thinks Africa is a true ally
The joint Africa position also argues for keeping the so-called country-led model at the World Bank, which puts governments that borrow in control of projects. There has been concern that Yellen’s efforts to make the bank tackle global issues would dilute their say in how the bank lends.
“We underscore the need to strengthen the country-driven approach and ensure (World Bank)-supported country programs are anchored on countries’ development strategies,” the document stressed.
That said, there is broad agreement across countries that the bank needs to be more flexible and responsive. Countries often complain projects take years to get off the ground.
“We expect the evolution process to deliver a more agile institution, responding effectively and with enhanced financial capability to address the needs of all clients,” the African document says.
One key question at the G20 meeting of finance ministers will be how much more money the reforms can squeeze out of the multilateral lenders’ existing balance sheets. A recent report by former U.S. Treasury Secretary Larry Summers and other experts, commissioned by the G20, argued there is no escaping a capital increase.
So far, Yellen and other wealthy shareholders have sidestepped the issue of putting more money into the bank so it has a financial arsenal to meet demands, from fighting poverty to tackling climate change and helping nations adapt to the ravages of more aggressive weather systems.
By Shabtai Gold, Devex