IMANI Report: Fierce Debates over How the World Bank Spends its Cash and Time in Africa

Monday, September 13, 2010

The World Bank is probably best equipped to contribute to big ticket, transformative, initiatives: trade corridors, integrated value chains, industrial parks etc., and all this on a purely strategic investment basis.  Everything else should be the burden of indigenous wealth creators and national governments, operating with funds generated through taxation, and of course accounting to their people how their monies are being employed to their benefit.

A delicate little town on the eastern shores of Southern Ghana.  
The main thoroughfare is lined with displays of over-spiced oysters elaborately displayed in glass-fronted wooden cases, in turn balanced adeptly on the calloused palms of young men and women with seemingly limitless energy.

In the distance River Volta – unspoiled by noisy turbines and concrete walls – firmly but elegantly pries its way into the Atlantic Ocean.  Here, on the shallow banks of the river, in a lushly green corner of the town, away from the bustle on the main road, is a cluster of green and blue concrete blocks finely spaced by glass edifices. And the World Bank is on trial.

The Country Director of the Bank, the calm but robust Ishac Diwan, takes on a highly articulate senior official of the Ghanaian Ministry of Finance and though he seems to be holding his ground quite well the beads of sweat on his furrowed brow clearly reveal that this is no cakewalk.  

Ishac had rather the focus on what the World Bank should be doing in Africa over the next 3 years not be overconcentrated on sector-based activity. Simply put, he thinks the matter is less one of which sectors – agriculture, energy, transport, ports, education etc – the World Bank prioritises in its “partnership” with the continent and more about the “systems” it helps build so that African governments can themselves take the lead in investing in their own country’s priority areas.
He makes an impassioned argument against the logic of World Bank folk, for instance, shuffling from town to town in Ghana trying to push for schools and hospitals and whatnots. “It is the government’s duty to so,” he says, “we should only participate when we can clearly add value”.  

The little group of about 9 people drawn from government, the World Bank itself, civil society and the business community, can’t fully agree on this or most other issues for that matter. But there is a general convergence at least in the tone of the debate – Africa needs to “graduate out of Aid”. That much is all clear, except the “how”.

Over the course of the last 6 months the group has met in different configurations and as part of a larger community of stakeholders drawn from all walks of life across sub-Saharan Africa. Forty countries across the continent have organised stakeholder meetings , with representation from youth, gender activists, entrepreneurs, academia, media, the political classes, vulnerable groups (such as people living with disabilities), and social dissenters of various shades.  
The purpose of all these consultations has been to identify a set of ideas, principles, ideals, and concrete actions that may characterise a new way of doing things as far as the “partnership” between the World Bank and the African continent was concerned.

The feedback contained in this vast outpouring of opinion from across Africa had been consolidated by the aforesaid group and they were now in the second day of trying to distil some kind of going-forward strategy that should, presumably, improve upon the existing state of affairs. The challenge was of course to ensure that the final strategy does reflects the thrust of the body of stakeholder opinions collated thus far. For example, how may one reconcile the somewhat eccentric demands of Horn of Africa nomads with the wide-ranging claims of agribusiness enthusiasts across Africa in some sort of unified continental strategy?   

By means of intricate algorithms, a priority matrix had been developed. The issues that matter to the African stakeholders who had expressed their views had been ranked according to how strongly and widespread they had featured in the consultations. Said issues had then been clustered into neat little categories in order to facilitate their presentation in written form and in the various summaries that this motley group will be sending out to stakeholders and opinion-makers all across Africa.
Interesting results had begun to emerge. Who would have thought for instance that “regional integration and trade” mattered more to African stakeholders than “health”, “water & sanitation”, “land & natural resources” and “peace & security” all combined? Who would have thought?

But there was the evidence, in black and white, staring back at this opinionated group of doers and talkers gathered in Sogakope to collate the views of their contemporaries from all parts of a continent they profess to so dearly love, so that this time around the World Bank Africa Action Plan (AAP) would be less the product of armchair experts in Washington D.C. and better reflective of the aspirations of African communities. Given the startling non-obviousness of the material they had been handed, the tension in the room was understandable.

One could of course explain away the low importance attached to “peace & security” by African stakeholders, to take one example from the consultative outcomes, by reminding oneself that only 10% of African countries are in the state of active conflict today, and crime is barely worse in African countries than in most American cities. One can almost discern why that particular subject might feature less prominently on the priority list of an archetypal African opinion-shaping community than the front pages of the western press might suggest. But still…the impartial observer would have gotten the impression that the feedback had been generated from a “forward-looking” perspective of the continent rather than from a “present-obsessing” mentality on the part of respondents.

So the group persisted. They begun to look for linkages between the various discrete sectors and to, therefore, more coherently cluster them into “pillars” – aggregated categories of issues – that are more smoothly and coherently handled with a uniform, coordinated, strategy, such as the proposed 3-year African Action Plan (AAP) aspired to become.   
So, for instance, an infrastructure “cluster” was created to encompass such related issues as “transport”, “energy”, “water & sanitation” and “ICT”.  On the other hand, “schools”, “hospitals” and “vocational centres” were seen as belonging more to a “social sector” cluster, even though elements of their financing suggested that they may as well be linked to the infrastructure bloc.

The argument that prevailed held that there was a qualitative difference in the role such social sectors played in the human development, social security, public welfare, civil protection, and national cohesion functions as compared with the previously mentioned infrastructure items.
“Housing” which was considered as being “borderline” ended up in “infrastructure” more because of how the subject was treated by respondents from the 40 sub-Saharan countries surveyed than because of any clear-cut methodology, though there were also persuasive arguments by some members of the small group in Sogakope that “proper planning” required for housing to be integrated into national infrastructure blueprints.  

36 hours of intensive arguments later the 5 neat super-clusters had emerged, and structured analysis could now be applied to these in order to suggest priorities for the proposed Africa – World Bank partnership. The output had been strictly mechanical insofar as the job was to sort out the raw feedback into analysable sets and not to perform surgery on the mass of other people’s opinions so that they may better accord with some pretty pre-conceived development theory somewhere. The group had heard the principle of “faithfully packaging the feedback of Africa’s diverse stakeholder communities” mentioned many times in the preliminary deliberations, with the Senior Finance Ministry Official consistently the most vocal on this point. But that is far from saying that the task had been straightforward.
Several hours of painstaking work could not be circumvented in the course of complying with aforesaid principle, but somehow the knot was eventually undone.
Yet, even though it had value for the overall aim of shaping the Bank’s view of its proper role in the development process in Africa, the output of the exercise also seemed a bit like a wish-list – albeit one subjected to the rigours of prioritisation.  By remaining faithful to the thrust of the African Action Plan consultations there was a chance that subtle arguments could be lost amid the clutter of demands, claims and emphases.

There was no doubt whatsoever that Africans felt strongly the need for a number of sectors critical to the development of the continent to receive special attention, and that an emphasis on these sectors would produce substantial development outcomes. This however did not on its own exclude the risk of the transcription process so amplifying the emphasis on such specific sectors to the extent of overshadowing more nuanced concerns about the structure of the relationship between the World Bank and African countries in and of itself.

It was at such a juncture that Country Director Ishac Diwan of the World Bank and the senior Government Official from Ghana began to drift somewhat apart. The official was adamant that a focus on “infrastructure”, quite apart from prioritising a vital sector, also represented a marked departure from the Africa – World Bank relationship of yesteryear, with its nitpicking and bean-counting, towards a more vibrant, and audacious, future.

What was a bit confusing was that the Senior Official couldn’t unambiguously support a view that all World Bank financial contributions to the countries should be channeled through “budget support” (i.e. simply paid into government coffers rather than disbursed on a project by project or program per program basis). One would have thought that this would have killed many birds with one stone. After all, government, upon receipt of the lump sum, could choose to do the entire infrastructure it wanted (assuming of course that sufficient social accountability existed to ensure an alignment of government focus with citizens’ priorities). Further probing appeared to suggest a discomfort on the part of Finance Czars in Africa with the so called “prior actions” and “triggers” that have seemingly replaced “conditionalities” in the Aid lingo. That is to say, on occasion, the new catchwords seem eerily similar to what they had come to replace in the wake of the Paris Process and the Accra Agenda for Action (global Aid reform agenda).

Nonetheless, as the meeting progressed, new possibilities appeared to emerge spontaneously for blending the multi-sectoral approach with the systems approach.  It was for instance discovered that the right interlinkages across the assembled feedback produced a viewpoint strongly favourable to the use of private-public partnerships in the provision of social infrastructure. Clearly, both sector-focus and systems thinking are evident in an approach like that.
The big idea was the emergence of a value-gauge that treats the “profitability” criterion in judging the suitability of PPPs more broadly by considering, for instance, the FDI (foreign direct investment) implications of infrastructure in a more rigorous fashion. The days when PPPs seemed bogged down by clichés such as BOT (Build-Operate-Transfer) and BOTT (Build-Operate-Train-Transfer) and BOM (Build-Operate-Manage) could well be truly over. And a braver newer world of more intricate arrangements may be beckoning. Or at least so it seemed to the motley crew gathered in Sogakope.

In the same vein, to set in concrete calls for greater “country ownership” of the World Bank’s activities in the various countries, new thinking in the mechanics of Bank-Africa engagement may involve such prospects as client countries (such as Ghana) actually making their development cases directly before the World Bank’s Executive Board.

In a sudden burst of contrition, World Bank officials present at the meeting acknowledged that the existing framework for addressing regional infrastructure needs has not been sufficiently regional, with country offices tending to cater for their own fragments of a proposed scheme rather than in fact making regional applicability a criterion in the assessment of most projects and programs, and actually implementing genuinely regional (instead of inter- country office) mechanisms for the pursuit of regional economies of scale and trans-regional synergies across the continent. The entrepreneurs around the table would have cheered had they not been keener on extracting more confessions and promises of better behaviour in the future.

Someone pushed for the bank “to go beyond MIGA” (providing political risk insurance to stimulate FDI through the eponymous subsidiary of the World Bank Group) and actually begin to capitalise on its superior knowledge of the African market (many people argue that “ignorance” constitutes the largest component of “risk”) and credibility with global institutional investors to provide matchmaking services to the benefit of private and PPP capital seekers in Africa.

Underlying all this “new thinking” seemed to be a new recognition that the Bank shall be able to convince stakeholders that it is interested in a genuinely radical break with the  past only if each new engagement with African countries contained a clear “Aid Graduation Test”, i.e. a demonstration as to how that activity shall contribute to the client’s country’s graduation from that type of Aid reserved for countries lacking even the means and willpower to provide for even the most basic needs of their people. Implicit in such a view is the notion that the Bank is probably best equipped to contribute to big ticket, transformative, initiatives: trade corridors, integrated value chains, industrial parks etc., and all this on a purely strategic investment basis.

Everything else should be the burden of indigenous wealth creators and national governments, operating with funds generated through taxation, and of course accounting to their people how their monies are being employed to their benefit.  It is not the place of the Africa Action Plan to prescribe exact formulae for each country in Africa regarding Aid Graduation. That is a matter for national budgets (with World Bank Country Assistance Strategies playing a minor, supporting, role); decentralised local governments; and effective regionalisation to take advantage of economies of scale across African states.

The gathering at Sogakope was fully aware of this. Their work was to take the first stab at collating the views of hundreds of African stakeholders into broad charts for a new course in a process that would last several weeks. Thankfully, as the dusk approached, clarity seemed to dawn, and ideas begun to burst forth.  In a few months, the product of their work shall find its way into wider forums.

Outside, River Volta cuddled its banks, as in the distance the din of the street hawkers hustling for their daily bread suffused the mangrove breeze.

Courtesy of IMANI Center for Policy & Education and www.AfricanLiberty.Org