- Mansur Muhtar, Vice President, Islamic Development Bank
Dr. Mansur Muhtar is the vice president of operations at the Islamic Development Bank (IsDB). A former minister of finance of Nigeria, he previously served as executive director on the board of the World Bank Group as well as the African Development Bank. In September, he led an IsDB delegation to the UN General Assembly. In this interview with Africa Renewal's Kingsley Ighobor, he discusses the activities of IsDB in Africa and his vision for Africa's development. These are excerpts from the interview.
The Islamic Development Bank (IsDB) is headquartered in Jeddah, Saudi Arabia. Tell us about its work in Africa?
Basically, we are a development finance institution. We provide loans and credits to member countries to support infrastructure development--social and physical infrastructure. In addition, the institution supports private sector development, and this is very important for African countries.
We have 27 African countries out of 57 member countries.
In terms of resources, since its inception in 1975 up to about the end of June [2022], the IsDB has advanced financing to African countries to the tune of $65 billion, including about $20 billion for trade-financing activities. But a lot of the financing also went into projects in sectors such as health, education, road transport, energy and so on.
Can you provide some examples of such projects in Africa?
Since the beginning of this year, the IsDB has approved projects in excess of $1 billion in Africa. For example, we financed the upgrading of roads in Uganda, the Watershed Water Resources Mobilization Project in Senegal, the Hydro Agricultural Development Project in Cote d'Ivoire, the provision of maternal and neonatal healthcare services in Mauritania and the development of technical and vocational education in Guinea
How do you deal with the private sector?
Our trade financing arm supports trade among African countries and between African countries and countries in other regions.
We also provide lines of credit and financing equity investment, as well as lines of finance to commercial banks in Africa for on-lending to small and medium enterprises. We have an arm that deals with the provision of insurance to mitigate the risk of borrowing and to encourage the flow of investment and expansion of trade.
Speaking at this year's UNGA, President Macky Sall of Senegal mentioned that credit rating institutions often consider Africa a high-risk region. It seems you are trying to tackle that challenge.
Yes. We do it in many ways. One direct way is we capitalize on our AAA rating. We are the only institution in our member countries that enjoys that rating, and it enables us to raise resources in the capital market. We do this through the issuance of Sukuk or Islamic bonds. We are pioneers in this area and have raised a lot of money through this means. This year, we expect to raise about $5 billion. Because of our AAA rating, we get the money cheaply, and we're able to transfer finance to African countries and other member countries.
We also have resources that have been made available to us by our shareholders. Recently, our shareholders endorsed a capital increase for the institution to do more for constituency countries.
In addition, we have the Islamic Solidarity Fund for Development, which currently has $2 billion. It's an endowment fund that is aiming to raise $10 billion. We use returns from this investment to soften the terms of lending to African countries and other developing countries.
We also partner with other institutions to mobilize resources. For example, we have a flagship programme, which is the Lives and Livelihoods Fund, that we set up with the Bill and Melinda Gates Foundation, and several other Arab donors, to pool resources and provide soft loans to African countries.
Since the beginning of this year, the IsDB has approved projects in excess of $1 billion in Africa. For example, we financed the upgrading of roads in Uganda, the Watershed Water Resources Mobilization Project in Senegal, the Hydro Agricultural Development Project in Cote d'Ivoire, the provision of maternal and neonatal healthcare services in Mauritania and technical and vocational education in Guinea.
As an African who has held several top positions nationally and internationally, how much does your experience influence what sectors IsDB focuses on in Africa?
The good thing is that the bank's staff is drawn from member countries, giving us a group of individuals with a rich and diverse set of experiences and expertise.
In terms of the development priorities, we want our agenda to be driven by country needs--and to be owned by the countries. So we prepare what we call a Member Country Partnership Strategy for member countries, which involves engagement with stakeholders to get a sense of their development priorities.
We complement this with additional studies to identify the binding constraints. At the end of the day, we sit down together, prioritize and see how we can align with their national priorities. We consider our comparative advantage as an institution. This allows us to come up with a portfolio of projects. Then, we go through an internal review process that ensures the projects meet the developmental objectives of the countries. The project cycle is a very elaborate process involving diligent review.
Are you happy with the impact your projects are having on Africans?
We attach great importance to results and impact. Development effectiveness is measured not so much by the amount of money we provide or the buildings or roads we construct. Rather, we ultimately evaluate them by how they transform people's lives, in terms of improving health and wellbeing, increasing their incomes and addressing poverty. We also ensure that our projects are environmentally sustainable and socially inclusive.
We make sure that women, young people and vulnerable groups benefit from these projects as much as possible. We have a monitoring and evaluation system. Even when the project is finalized, we do a project completion review and evaluation reports that allow us to draw lessons and to see how we can improve on future project preparation, as well as safeguard project sustainability.
I dream of Africa free of poverty--an Africa where no one is left behind in the development process, where human development indicators related to education, maternal and child healthcare and access to water and sanitation are up to a reasonably high level.
About 280 million Africans are hungry. There is a problem of food insecurity on the continent? What is your bank doing about it?
This is a major area of interest and concern to us. We've been actively involved in the agriculture sector in Africa, supporting improvements in agricultural productivity and enhancing access to markets and technology.
We have articulated policy on agriculture and nutrition. Our interventions in agriculture have received renewed impetus following the Russia-Ukraine crisis, which has accentuated the food insecurity situation in Africa. Food and fertilizer prices are rising. Many of our member countries rely heavily on food imports.
Consequently, we have launched a programme of support called the Food Security Response Programme. We anticipate spending $10.5 billion to support our 57 member countries.
Aspects of the programme will comprise new funding amounting to about $3 billion to $4 billion. A major component of the programme, about $4.5 billion, will be geared towards meeting emergency food import needs. We will also be supporting the private sector with about $270 million.
In the short term, the programme will provide emergency food supplies, inputs and fertilizer to those who need them the most. In the medium-to-long term, we will seek to address the structural problems of the agricultural sector, including enhancing productivity, increasing farmers' access to markets and finance, making agriculture more climate resilient, and boosting productivity through technology-enhancing measures and supporting value chains to promote commercial agriculture.
Your bank is supporting the Global Refugee Fund. Why?
This is a major initiative we launched recently. We have been working closely with the United Nations High Commissioner for Refugees (UNHCR) on the refugee issue. Many of the refugees--now over 100 million--have been displaced because of conflict, climate-related disasters or human rights-related issues, among others. We appreciate that most of them are from our member countries, including African countries.
These refugees are facing challenges. Their needs are not met because of a shortage of funding. It's in that context that we set up this fund, along with UNHCR. Each of us--IsDB and UNHCR--has put aside seed money of $50 million, bringing the total amount to $100 million.
We hope to encourage other donors and philanthropic organizations to contribute to the fund for which the target is $500 million. We will use the money to support refugees, particularly in providing health services, education, shelter, food and other basic needs.
Women and youth empowerment are cross-cutting issues in our strategy. That means we continually explore ways to use our projects to empower women and youth, be it in education, health, or promoting entrepreneurship. We are funding an initiative called Women Entrepreneurs Finance Initiative (We-Fi) that supports women entrepreneurs, and we have quite a few of them in African countries.
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What are your views regarding the empowerment of women and youths?
Women and youth empowerment are cross-cutting issues in our strategy. That means we continually explore ways to use our projects to empower women and youth, be it in education, health, or promoting entrepreneurship.
We are funding an initiative called Women Entrepreneurs Finance Initiative (We-Fi) that supports women entrepreneurs, and we have quite a few of them in African countries.
We appreciate that Africa needs to build capacity to succeed in implementing development programmes. In this regard, we bring people from different parts of the world to share experiences and expertise. We have connected African countries with nations, such as Turkey, Malaysia and Indonesia to build capacity.
We are the only multilateral development bank that runs a scholarship programme for our member countries. To date, we have given around 20,000 scholarships, of which over 6,000 were provided to Africans to acquire undergraduate and postgraduate degrees.
As a leading development expert, what kind of Africa do you dream of in, say, 10 years?
Our countries adopted the Sustainable Development Goals (SDGs) that have been guiding some of our development trajectories. The process of adopting the SDGs was rigorous, exhaustive and participatory. We also have the African Union's Agenda 2063. My dream for Africa is inspired by these.
I dream of Africa free of poverty--an Africa where no one is left behind in the development process, where human development indicators related to education, maternal and child healthcare and access to water and sanitation are up to a reasonably high level.
For this to happen, we need to scale up financing. We need political leadership, commitment, focus and prioritization. We also need support from global partners. We must have a compact as a global community, with each of us responsible for and committed to achieving progress towards our shared challenges.
