AfDB Fires Back at World Bank Over Africa Debt Remarks
By Adedapo Adesanya
Following a statement made recently by the World Bank President, Mr David Malpass, saying that development banks, including the African Development Bank (AfDB) and their lending policies were weighing heavily on Africa’s debt problems, the AfDB has fired a salvo, affirming that the remarks were inaccurate and not fact based.
In a statement issued by the regional lender, it was reiterated that Mr Malpass not only impugned the integrity of the bank, but undermined its governance systems, and was wrong to imply that they operate under different standards from the World Bank.
“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,” AfDB stated.
It said further that through its Africa Legal Support Facility (ALSF), it has successfully supported countries to negotiate terms of their royalties and taxes to international companies, and terms of their non-concessional loans to some bilateral financiers.
Further tackling all points raised by Mr Malpass, the bank noted that the World Bank’s operations approved for Africa in the 2018 fiscal year amounted to $20.2 billion, compared with $10.1 billion by the African Development Bank, showing that they have a larger operation on the continent than the AfDB.
With regards to Nigeria and South Africa, “the World Bank’s outstanding loans for the 2018 fiscal year to both countries stood at $8.3 billion and $2.4 billion, respectively. In contrast, the outstanding amounts for the African Development Bank Group to Nigeria and South Africa were $2.1 billion and $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,” the statement further noted.
The AfDB then added that Development Banks continue to play critical roles in development efforts and in the aspirations of developing countries, most especially in Africa.
Business Post had reported that at a World Bank-IMF Debt Forum on Monday in Washington DC, Mr Malpass, noted that development banks and International Financial Institutions (IFIs) were worsening already-challenging debt situations across the world.