World Bank endorses Africa’s progress

Africa stands to gain from a new decision-making approach by the World Bank regarding investment priorities.

The lender is ditching its Washington-based decision making and is opting for a platform where the key issues will be tackled through increased participation.

It is expected to provide Africa with opportunity to rate its priorities and channel resources to critical areas such as infrastructure development.

Previously, the Bank came up with uniform programmes for region with little appreciation of the diversity in terms of resource endowment, governance, and state of development.

“Africa has undergone tremendous changes over the last decade and our engagement need to be in line with the new realities hence seize this unprecedented opportunity and adjust strategy to best support Africa’s development challenges,” said Shantayanan Devarajan the chief economist of the World Bank’s Africa Region.

He added: “Africa is increasingly opting for home grown solutions to its challenges and the World Bank is cognizant of these new realities, hence the need to consider how to be most effective in supporting the progress taking place.”

The new strategy is expected to be realised through ongoing consultations undertaken by the World Bank with governments, development institutions, the private sector, scholars, think-tanks and other NGOs across the continent.

Since 2005, the institution and its affiliates have engaged Africa on the basis of the African Action Plan (AAP), giving weight to aid and grants for projects.

This approach has failed to recognise the use of internally generated resources.

However, the rising demand for primary commodities and improved global commodity prices, have allowed a number of African countries to use internally generated resources to finance budgets.

For instance, Kenya is financing 95 per cent of its domestic budget from internal revenue and local borrowing, a shift from the past where the budget was largely financed through aid and grants.

“African economies have been growing at over five per cent a year over a decade, with the growth being widespread as 22 non-oil-exporting countries sustaining better-than-four-per cent growth leading to the fastest decline in poverty levels, high primary school enrolment and increased usage of mobile telephony for communication and financial transactions,” said Obiageli Ezekwesili, the Bank’s Vice President for Africa.

In 2002, donors at Monterrey, Mexico pledged to increase aid to Africa, committing to provide 0.25 per cent of their annual revenue.

The 2005 G-8 Summit at Gleneagles, Scotland renewed the commitment of the world’s richest nations to support Africa’s development and signalled the intention to move beyond the Monterrey pledges.

At Gleneagles, the G-8 agreed to mobilise 100 per cent cancellation of debt owed to International Development Association (IDA), the International Monetary Fund (IMF), and the African Development Bank (AfDB) by the Heavily Indebted Poor Countries (HIPCs), majority of which are in Africa.

At present, 14 completion point HIPC countries in Africa are eligible for relief under the G-8 proposal, and the number will increase as more of its 32 HIPC countries qualify.

Strong macro-economic policies such as prudent fiscal and monetary policies have strengthened these economies, enabling them to weather the recent financial crisis.

“While the global crises hit the continent badly through reduced global demand for commodities, falling commodity prices and decline in remittances, African policymakers have continued to pursue prudent macroeconomic policies and growth is expected to rebound to a forecast five per cent this year,” said Ms Ezekwesili.

The AAP programme was initiated as aid to Africa increased sharply following the drive to implement the Millennium Development Goals (MDGs).

However, with less than three years before the target date of 2015, there are huge disparities on the progress across the continent on the eight MDGs.