Washington, DC — The World Bank, which is hosting its annual meeting in Washington this week in conjunction with the International Monetary Fund, has a new strategy it says can help the continent transform itself. The 46-page document, Africa's Future and the World Bank's Support to It, describes "an unprecedented opportunity for … sustained growth" in sub-Saharan Africa. Driving the approach is Obiageli Ezekwesili, the Bank's vice president for the Africa Region. She is a chartered accountant with a degree from Harvard University's Kennedy School of Government and an undergraduate degree from the University of Nigeria. She is a former Nigerian minister of education. In a lengthy interview with a team from AllAfrica, she outlined the Bank's new strategy and discussed key challenges. Excerpts:
Why issue a new Africa strategy?
The world has shown such rapid change since the Africa Action Plan in 2005, following the Gleneagles conference, where there was a pledge of huge engagement with Africa. Since then, there's been phenomenal change in the perception and the performance of Africa in the global economy and the future that Africa's economy potentially has in the realm of global economics.
How does this document differ from the previous plan?
First, it builds on the energetic and enthusiastic involvement of African citizens in the process. We had a huge consultation process - across the spectrum of civil society, the private sector, government, policy think tanks, academics and followers of Africa in general. The substance also differs from the Africa Action Plan.
This is a strategy that builds on the strength and resilience that the continent has shown over the last decade, as it has pursued prudent macro-economic policies and, in the process, has been able to exorcise the ghost of macro-economic instability that was a major constraint to growth. Whereas in 1995 or thereabouts, some 13 countries had inflation rates above 15 percent, only two countries in Africa have those kinds of challenging indicators in 2011. That's important to note.
Africa has grown over the last decade at an annual average of 5.7 percent, before the outset of the financial global economic crisis. This is way above the less than two percent, or even negative growth, in the decade before.
We also see, with that growth, the annual decline of poverty at one percent point over a decade. Though Africa still has a way to go on the MDGs [Millennium Development Goals], we've seen a greater emphasis on the MDGs in the last decade, and many more countries stand a chance of achieving a number of the MDGs.
Together with the private capital flows and the discovery of Africa as a potential credible investment destination by global capital, these give us a context for the approach we should take toward an Africa strategy.
What are the key elements of the new strategy?
We have moved away from just growth to say: what should growth deliver? Growth should deliver jobs – an inclusive economy where there is a broader participation of citizens. Therefore, the first pillar is competitiveness and employment .
The second pillar emphasizes vulnerability and resilience . Even though we talk about all the positives over the past decade, we still have a continent that is susceptible to macro-economic shocks - energy price increases or food price increases or low performance of the global economy. How do you use sound macro-economic policies to insulate Africa against shocks? Whether it is shocks that come through health and disease burdens or shocks that come as a result of political upheavals, you need to find resilience mechanisms for them.
We put this on a foundation of governance and public sector capacity . We heard from citizens, as well as some of the leaders on the continent, that Africa needs sound governance and institutions that enable Africa to achieve the outcomes that our strategies focus on. We know – and it has been proven - that there's an economic dividend that comes with a peaceful election.
What is the World Bank's role in promoting governance and democracy?
No external party can help Africans get better governance. The work has to be by Africans, by institutions within Africa and by citizens. The World Bank role is to facilitate as much as possible. We have instruments that enable us [to help]. This institution has a repository of knowledge and economic analysis on the basis of which you can make evidence-based policies. Civil society, the private sector and the government need to be able to discuss policy alternatives, and it's best when that kind of a conversation is nourished by evidence – not simply anecdotes.
Also, our financing supports the process of building institutions. We have a governance and anti-corruption strategy – globally, not just with Africa - which says we pay attention to the issues of governance and corruption, because poor governance and corruption are obstacles to economic growth and development.
We are focused on basic service delivery and showing that, through public-expenditure tracking systems, we can follow the money invested in education, health and roads.
For Africa, the World Bank cannot simply be an institution for transfer of resources. Africa needs to take advantage of the global best practices that the World Bank can channel towards making policy choices. We have a focus on education, including science and maths education, and on growing the quality of education.
We support various centres of excellence. We have a centre of excellence in water, in the sciences, in Burkina Faso. We support Abuja University - the Mandela Foundation is part of that. And we are doing a similar kind of thing in East Africa.
How does the Bank promote transparency and accountability?
The demand for accountability has to come from every strata of society - engagement of civil society with government and the private sector, so that citizen participation happens. The analysis [provided by the World Bank] is important to nourish public debate, and that's important to nourish democratic institutions that underpin accountability and therefore cause government to do what it really ought to do.
How do women fit into the strategy?
In every country where we had consultations, the women were spectacular! Women are Africa's future. If you're going to get growth on the continent, you need to engage the women optimally. This is something that through economic empirical study, we have proven: getting women to participate is smart economics.
A number of countries have been reducing disparity between boys and girls in school. Whether it's Uganda, Tanzania or Burkina or Mali, you see disparity narrowing. That's important. The longer girls stay in school, the more they have choices, the more they can participate economically.
The energy and enthusiasm of women to engage in economic activity is unbelievable. Women are the heart of Africa's agriculture, and therefore access to the extension services for the smallholder farmer needs a different kind of approach.
Financial literacy is another important objective for women. We provide technical assistance - we're doing that with Malian female farmers – access to seeds and inputs, integration into the markets, [promoting] understanding of agricultural policy.
The infrastructure deficit outlined in the strategy document is sobering. What strategies is the Bank employing?
The infrastructure deficit is a key constraint to growth, so we have a focus on it. There has been a six-fold increase in the annual World Bank portfolio for infrastructure [projects] – from something like U.S.$600 million in 2000 to about $3.6 billion today.
But it's not just our investment that matters – it's what our investment has been able to unlock. Our study, the Africa Infrastructure Country Diagnostic, showed that on an annual basis, Africa needs to invest some $93 billion on infrastructure. Currently it invests some $45 billion, leaving a balance of some $48 billion.
That takes us back to governance. Our study shows that if you had policies, systems and institutions that spent well, you can actually get $17 billion dollars [in savings]. If you were able to invest that, you are talking about a gap of $31 billion.
This would have to come from multiple sources - better domestic resource mobilization and better collection of taxes and partners like ourselves doing a little bit more. There is an 18 percent increase in IDA 16 [the latest replenishment of the International Development Association], the World Bank agency that provides financing for the poorest countries. That means an increase on our previous investment in Africa infrastructure will happen. The same thing will likely happen with the African Development Bank, with the EU and other development partners.
The least tapped is the private sector. And so we state in the strategy that we will work with the private sector in a more deliberate way, to push the agenda on public-private partnerships. We will bring to bear our World Bank group assets – the IFC [International Finance Corporation], our private sector, and MIGA, our Multilateral Investment Guarantee Agency - to enable us to work more with the private sector in taking advantage of the opportunities for infrastructure development in Africa.
What do you see as the role of governments in infrastructure development?
Important reforms need to be put in place to provide the enabling framework that gives the level of predictability and certainty the private sector requires to enter the investment space for infrastructure development on the continent. It would be wise for African governments to learn some of the things that Uganda did, for example, and is continuing to do in its energy sector.
That's how we were able to do a PPP [public-private partnership] with the Bujagali Hydro Project [and] the toll road with the Senegalese government.
Private capital is realizing that Africa represents opportunity and that risks can be mitigated. If governments pursued the kinds of reforms that would boost the confidence of the private sector, I think that the joining of public and private sector roles can actually accelerate.
Africa did this with telecommunications - and see what it got. A decade ago, the number of Africans that had access to telecomm services was something like about 20 million. Now you're talking about 450 million – that's a revolution.
In my own country, Nigeria, you had only 500,000 telephone lines as of seven years ago. Today Nigeria is almost hitting the 60-million mark in telephones!
How did that happen? It started with governments understanding that the state monopolies in telecommunication were simply a fiscal drain. There was so much of the budget that could have gone to education, to health, to water that was being used to hold up almost decadent monopolies in the telecommunication sector that were not delivering any efficient services to the citizens.
Governments got the message that this is a sector that the private sector should be leading, and all they needed from government was a deregulated and competitive environment where the policy and legal framework provided the space for the private sector to do good business, and to be accountable to both citizens and the state for quality of service.
Yet, this has happened only on the voice side. When you are talking about Internet penetration, it's still the lowest [in the world], something like five to 20 percent. If you achieve the kind of penetration in data that we have achieved in voice, that's going to create a whole set of economies. I see opportunity there.
What has to be done for the rapid expansion in telecom to be replicated in other sectors?
Having learnt that you can get a spectacular success by freeing the private sector to be the driver of growth and development, we have to identify the obstacles to private capital [in other areas].
In the energy sector, there are important obstacles that stand in the way of the private sector. And there's the agriculture sector - the largest private sector in Africa because it employs 70 percent of Africans. We need to unleash the possibilities by embarking on sector-specific reforms, including water management, land tenure and property rights. And we need new ways of supporting farmers - the mix of seeds and fertilizer the farmer needs, plus the technology.
The issue of infrastructure impacts agriculture. How do you structure investment in roads on a regional-integration basis, so that you maximize the opportunity to connect your infrastructures to your ambition for agriculture?
While the farmer today operates at a very subsistence level, some of those farmers can become market integrated.
Tell us more about agriculture in the new strategy.
We organised our focus to be in sync with the African Union, Nepad [New Partnership for Africa's Development], and CADEP, which is Nepad's Comprehensive Agricultural Development Plan, the organizing framework for enabling agricultural production and productivity.
We see more countries putting a focus on agriculture. Public investment in agriculture has increased in a number of countries, though not at the rate that would create a revolution. But it's not just the quantum, it's the quality of the investment.
Public investment in agriculture has to be effective and efficient. You can't afford to let the budget for agriculture go toward financing the purchase of subsidized fertilizer when that fertilizer will not get to the farmers.
It becomes a governance issue, because some politically tied people are benefiting from the fertilizers, whereas the poor farmer is not getting it. You've got to have effective and efficient composition of the public expenditure on agriculture in order for government investment in agriculture to be useful to the farmers.
In summary, my take is we have 13 or so countries in Africa that are achieving an agriculture productivity growth rate of about three percent. What we are aiming for, in partnership with governments and other partners, is that we have some 20 countries that achieve five percent agricultural productivity growth annually, on a sustained basis. Then you will know Africa is really coming full force into the global agricultural space.
What does the Bank propose to do about the challenges for Africa from climate change?
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The climate change agenda is an important one for Africa, and it's really great that Africa will be hosting the rest of the world during COP 17 [UN Convention on Climate Change] in Durban later this year.
Africa is already suffering the impact of climate change, whether it's the coastal erosions or the droughts or floods across the continent. But Africa didn't really contribute to global warming – less than four percent of emissions are attributable to Africa.
It is urgent that Africa has a strategy for adapting to the new environment. Congo-Brazzaville, DRC [the Democratic Republic of Congo], Cameroon, and other forestry-endowed countries in the Congo basin are impacted by deforestation. Agriculture is harmed when soil erosion and degradation impacts fertility. Our estimate is that yield, in some cases, could be reduced by as much as 30 percent if Africa does not urgently address climatic conditions.
Our strategy sees this as a threat - but also as an opportunity for Africa. For example, developing Africa's hydro-energy can support development, while being environmentally responsible. We are working both at the country level and on a regional basis to help support this process of adaptation.
We also support a country like South Africa that is involved in mitigation – we worked with them on the ESKOM energy project, which focuses on solar and wind. We have a role on the knowledge side [and on] the investment side. We also work with the African Union as partners to help with the technical expertise that is necessary for the continent to be part of the climate change dialogue.
And how does health figure into the strategy?
Health issues are critical for Africa, which has major disease burdens like HIV/Aids and malaria. It was not until the World Bank pioneered a robust engagement that others came along. Today, almost every bilateral partner has a health program of support to Africa, and so many foundations, like the Bill and Melinda Gates Foundation, are huge in supporting the health sector in Africa.
We have what we call a 'spaghetti bowl' of resources coming from all kinds of players into the health sector in various African countries, and the financing side for addressing disease burdens is going well.
So what should we do if the story is not about money? We must bring our knowledge and expertise into the building of country capacity in health.
We have a focus on health systems, the whole logistics of how services are delivered to the poor. You know that Africa has been exporting nurses and doctors who take care of people in advanced economies. How do we train and retain health experts in Africa? How do we manage drug supplies and maintain standards of services? These issues are the major area of focus in health for the African region and the World Bank at large.
In the strategy, we highlighted making improvements across the continent on child and maternal mortality. And [we highlighted] nutrition, which is an important element of the agriculture agenda but is also clearly linked to health.
When you look at our strategy, you see that it's multi-sectoral and that it is focusing on outcome. For Africa to deliver inclusive, broad-based participatory growth, the continent has to become more competitive and more productive. That's what we are trying to achieve.
