African Development Bank rebuts World Bank President’s comments on Africa’s debt profile following TODAY NEWS AFRICA article

1,033FollowersFollow

The African Development Bank has reacted to comments made by the World Bank President David Malpass that some Multilateral Development Banks, including the African Development Bank, have a tendency to lend too quickly and in the process, add to the continent’s debt problems.

“This statement is inaccurate and not fact based. It impugns the integrity of the African Development Bank, undermines our governance systems, and incorrectly insinuates that we operate under different standards from the World Bank. The very notion goes against the spirit of multilateralism and our collaborative work,” the African Development Bank said in a statement received by TODAY NEWS AFRICA in Washington D.C.

“For the record, the African Development Bank maintains a very high global standard of transparency. In the 2018 Publish What You Fund report, our institution was ranked the 4th most transparent institution, globally,” the Bank said.

It added: “The African Development Bank provides a strong governance program for our regional member countries that focuses on public financial management, better and transparent natural resources management, sustainable and transparent debt management and domestic resource mobilization. We have spearheaded the issuance of local currency financing to several countries to mitigate the impacts of foreign exchange risks, while supporting countries to improve tax collection and tax administration, and leveraging pension funds and sovereign wealth funds to direct more monies into financing development programs, especially infrastructure.

“The African Development Bank’s Africa Legal Support Facility (ALSF) supports countries to negotiate terms of their royalties and taxes to international companies, and terms of their non-concessional loans to some bilateral financiers. We have been highly successful in doing so.

These are the facts:

“The World Bank, with a more substantial balance sheet, has significantly larger operations in Africa than the African Development Bank. The World Bank’s operations approved for Africa in the 2018 fiscal year amounted to US $20.2 billion, compared to US $10.1 billion by the African Development Bank.

“With regard to Nigeria and South Africa, the World Bank’s outstanding loans for the 2018 fiscal year to both countries stood at US $8.3 billion and US $2.4 billion, respectively. In contrast, the outstanding amounts for the African Development Bank Group to Nigeria and South Africa were US $2.1 billion and US $2.0 billion, respectively, for the same fiscal year.

“With reference to the countries described as “heavily indebted,” our Bank recognizes and closely monitors the upward debt trend. However, there is no systemic risk of debt distress.

“According to the 2020 African Economic Outlook, at the end of June 2019, total public debt in Nigeria amounted to $83.9 billion, 14.6% higher than the year before. That debt represented 20.1% of GDP, up from 17.5% in 2018. Of the total public debt, domestic public debt amounted to $56.7 billion while external public debt was $27.2 billion (representing 32.4% of total public debt). South Africa’s national government debt was estimated at 55.6% of GDP in 2019, up from 52.7% in 2018. South Africa raises most of its funding domestically, with external public debt accounting for only 6.3% of the country’s GDP.

“Development Banks continue to play critical roles in development efforts and in the aspirations of developing countries, most especially in Africa.

“Given substantial financing needs on the African continent, the development assistance of the African Development Bank, the World Bank and other development partners remain vitally important, with increasing calls for such institutions to do even more.

“The lending, policy, and advisory services of these development institutions in their respective regions are often coordinated and provide substantially better value-for-money to developing nations, compared to other sources of financing. As a result of the African Development Bank’s AAA-rated status, we source funding on highly competitive terms and pass on favorable terms to our regional member countries. Combined with other measures to ensure funds are used for intended purposes, it helps regional member countries finance debt and development in the most responsible and sustainable way.

“With regard to the need for better lending coordination and the maintenance of high standards of transparency, the African Development Bank coordinates lending activities, especially its public sector policy-based loans, closely with sister International Financial Institutions (notably the World Bank and the IMF). This includes reliance on the IMF and World Bank’s Debt Sustainability Analyses (DSA) to determine the composition of our financial assistance to low-income countries; and joint institutional approaches for addressing debt vulnerabilities in the African Development Fund (ADF) and International Development Association (IDA) countries.

“In addition, country economists of the African Development Bank fully participate in regional and country level IMF Article 4 missions. Contrary to suggestions, these are just a few concrete examples of historic and ongoing coordination between sister Multilateral Development Banks, IFIs, and development partners. The African Development Bank is committed to the development of the African continent. It has a vested interest in closely monitoring debt drivers and trends in African countries as it supports them in their efforts to improve the lives of the people of Africa.

“We are of the view that the World Bank could have explored other available platforms to discuss debt concerns among Multilateral Development Banks. The general statement by the President of the World Bank Group insinuating that the African Development Bank contributes to Africa’s debt problem and that it has lower standards of lending is simply put: misleading and inaccurate”.

Simon Ateba
Simon Ateba
Based in Washington, District of Columbia, United States of America, Simon leads a brilliant team of reporters, freelance journalists, analysts, researchers and contributors from around the world to run TODAY NEWS AFRICA as editor-in-chief. Simon Ateba's journalistic experience spans over 10 years and covers many beats, including business and investment, information technology, politics, diplomacy, human rights, science reporting and much more. Write him: simonateba@todaynewsafrica.com

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Trending Now

U.S. President-elect Joe Biden says he’s concerned about escalating violence in Ethiopia and worries about civilians

U.S. President-elect Joseph R. Biden Jr. on Monday said he was concerned about the escalating violence in Ethiopia. In a call with the United Nations...

U.S. President-elect Joe Biden speaks with Presidents of Kenya, Argentina and Costa Rica, and UN chief

U.S. President-elect Joseph R. Biden Jr. on Monday spoke with world leaders, including President Uhuru Kenyatta of Kenya, the second African leader after his...

Biden to use walking boot for several weeks after sustaining fractures while playing with dog, doctor says

U.S. President-elect Joe Biden sustained a sprain of his right foot while playing with his dog, Major, his doctor said on Sunday. "Initial X-rays are...

Ethiopian forces set to take Tigrayan capital, as many fear mass civilian deaths

The Ethiopian military said late on Friday that government forces were set to take control of Mekelle, the regional capital of Tigray, even as...

Nigerian-American Adewale Adeyemo makes history as President-elect Biden announces members of his economic team

U.S. President-elect Joe Biden on Monday announced key members of his economic team, including Janet Yellen as Secretary of the Treasury; Neera Tanden as...

President-elect Joe Biden slips while playing with dog, twists ankle

U.S. President-elect Joseph R. Biden Jr. slipped while playing with his dog, Major, and twisted his ankle. The President-elect is being examined at Delaware Orthopaedic...

U.S. House members ask Trump admin to put on hold deportation of asylum-seekers from Cameroon and other African countries

United States House of Representatives members on Tuesday called on the Trump administration to put on hold the deportation, slated for Wednesday, of asylum-seekers...

U.S. ‘appalled by persecution of pro-democracy advocates in Hong Kong’

The United States government said on Thursday it was "appalled by the Hong Kong government’s political persecution of Hong Kong’s courageous pro-democracy advocates." "The...

In first sit down interview since defeating President Trump, President-elect Biden identifies the four crises he’ll face

U.S. President-elect Joseph R. Biden Jr. on Thursday identified the four crises his incoming administration will face when he and Vice President-elect Kamala Harris...

U.S. must stop vilifying immigrants, says Biden homeland security nominee Alejandro N. Mayorkas

The United States "must stop vilifying" immigrants, President-elect Joe Biden's nominee for Secretary of Department of Homeland Security Alejandro N. Mayorkas said on Thursday,...

Biden: We can and must do more for people with disabilities – statement

Statement by President-elect Joe Biden on United Nations International Day of Persons with Disabilities Today, Jill and I join with communities, advocates, and activists around...

Democrats and Republicans finally get serious about COVID-19 relief deal before Christmas

The Democrats and the Republicans are finally serious about reaching a COVID-19 deal before Christmas, as new cases increase and hospitalizations and deaths expand...

52,000 people have died from COVID-19 in Africa from 2.1 million infections, the lowest death toll in the world

More 52,500 people have died from COVID-19 in Africa from over 2.1 million infections, according to the latest data released by the Africa CDC. The...

President-elect Biden appoints Brian Deese as Director of the National Economic Council

U.S. President-elect Joe Biden announced on Thursday that veteran economic and climate expert Brian Deese will be appointed to serve as Director of the...

U.S. ‘appalled by persecution of pro-democracy advocates in Hong Kong’

The United States government said on Thursday it was "appalled by the Hong Kong government’s political persecution of Hong Kong’s courageous pro-democracy advocates." "The use of courts to silence peaceful dissent is a hallmark of authoritarian regimes and underscores once again that the Chinese Communist Party’s greatest fear is the free speech and free thinking of its own people," U.S. Secretary of State Mike Pompeo...
error: Alert: Content is protected !!
Share
Tweet
WhatsApp
Pin
Share