Global Development: Views from the Center
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September 27, 2006
Why An African Development Bank?
Posted by Sheila Herrling at 02:54 PM
I arrived in Abidjan, Cote d’Ivoire in February, 1994 to begin what was to be an almost 5 year tenure in the Office of the U.S. Executive Director to the African Development Bank. It was a tenure that would see the Bank, under President Babacar Ndiaye, driven to the brink of collapse and a Bank, under President Omar Kabbaj, reestablish its financial standing and regain some (though not much) program and institutional credibility. Now, under new President Donald Kaberuka, the Bank is at a real crossroads. In many respects, it ought to feel intense pressure to justify its existence. The question is how?
On September 3, CGD released a new report, Building Africa's Development Bank which puts forward guiding principles for the Bank to reestablish itself as a premier, results-based development institution with a comparative advantage distinguishing if from other donors. And, particularly, from the World Bank. Indeed, if the AfDB were to design a strategy for operationalizing these principles, it could well teach the World Bank a thing or two.
The report puts forward six recommendations to Bank management and shareholders In launch events both in Tunis and here in Washington, the recommendations received broad support. Questions move very quickly to the “hows”:
1. How to ramp up staff and programs in infrastructure with the uncertainties around the Bank’s location?
2. How to provide sufficient oversight with a non-resident Board?
3. How to lead on issues without lending?
4. How to get the other donors to provide the required space to the AfDB to take the lead on infrastructure?
5. How to better measure the AfDB's impact, which will undoubtedly require investments in building statistics capacity and institutions in member countries?
President Kaberuka is establishing a High-Level Advisory Panel to help his management team navigate the next phase of the Bank’s recovery. But, often times the best ideas – those most practical, workable, visionary – come from hardworking, creative practitioners within the development community and the everyday people that the international financial institutions are supposed to serve.
We would love to hear your comments on CGD’s report and your ideas for how the AfDB could begin thinking about the “hows” above.
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Comments
About the question of “hows“, I have four points to tackle:
1. “Bank’s focus on infrastructures: Transportation, electricity and water”. I have never read as such concise recommendations on African matter before. Congratulations! This is the better reorientation of international flow of funds ever made. Instead of being oriented into collective infrastructures, the ODA disbursement is up to now hampering private sector therefore creating a defective capital market.
2. Sharing the “bank’s focus”. The “bank’s focus” has to be shared and defended by all countries, international public banks and aid organization. It is already a chance that the World Bank President, Paul Wolfowitz, declared in June 2006 during Washington AGOA forum, I quote “Since the 90s, we have widely stopped investing in infrastructures. But we are back to it, with more determination and I think other development partners will do the same”. Global focus on infrastructures and in other sectors under collective responsibility will create capital flow synergies in Africa between FDI, private and official creditors.
3. How “to lead without lending?” By creating a strong institution and improving its image through a knowledge-based strategy. For an institution or a country to achieve this, there is a must of attracting the best worldwide skilled manpower.
4.What has to be avoided to cope with the new challenges in term of organization? The Bank might be aware of not getting more structures than needed ones. When this happens in an organization, individuals’ efforts decline constantly. Bertrand Russel in “Essais sceptiques” bequeathed us tutorial on that natural risk. Keep this danger in mind.
Good luck for the African Development Bank.
Posted by: Dr Carpophore Ntagungira at September 30, 2006 10:07 AM