Various actors, in the international financial ecosystem, are converging in Washington DC this week (April 10-16, 2023) in what is commonly known as the Annual World Bank Spring meetings. Convened by the Boards of Governance of the World bank and IMF, the meetings have converged bankers, treasury heads and ministers of finance, parliamentarians, private sector leaders, representatives of civil society organizations, experts and academics among others. They target to discuss the world economic outlook and other issues of global concern including poverty eradication, economic development, sovereign debt sustainability and climate action.

Delegates in the 2022 Annual and Spring Meetings | Source: IMF

This happens against the backdrop of a globe – encumbered by polycrises. Extreme poverty has risen for the first time this century, and food and fuel prices remain high due to inflationary pressures largely driven by the war in Ukraine and the impacts of Covid-19 pandemic. Increasing vulnerability to climate change demands attention to disaster risk reduction and investment in climate sensitive technologies. However, in the parts of the world where the polycrises manifest the most, governments struggle with low ability to mobilise development finance. This has precipitated a sovereign debt crisis that is ensuing in many developing countries especially in sub-Saharan Africa where governments are now spending more on debt servicing than development.

Despite this, the World Bank, which is expected to provide leadership in tackling these issues has been criticised for being too slow, unresponsive and risk-averse. Whereas the Bank played an instrumental role in the 2000s by providing leadership, funding and technical support that was critical in tackling global poverty, it is accused, today, of being weak, non-inclusive and ineffective in tackling the crises of this decade.

Coincidently, the 2023 Spring Meetings proceed at a time when the Bank is in transition, prospecting a new President. The US government has nominated former CEO of MasterCard – Ajay Banga to succeed David Malpass as World Bank President. He is touted to be a proponent of inclusive and sustainable growth (which are things the bank ought to be concerned about) and pro-reform of the bank. The Spring Meetings this year therefore herald a watershed moment – during which the multiplicity of stakeholders must rise to the occasion to get concessions about reform of the World Bank and policy commitments towards addressing the multiple crises the world faces today.

From an African perspective, many argue that reform of the World Bank is long overdue. Now more than ever, the world deserves a review of the governance and voting powers of the World Bank and IMF to promote inclusion and enhance their leadership and effectiveness.

Here are my thoughts about some wins that delegates participating in the meetings should pursue and advocate for:

4. Bigger and better lending. There is consensus that there is a huge financing gap for development and climate action. As such, the bank must now expand its lending and widen concessional financing. It must be deliberate in aligning its lending and technical support with priorities of governments and economies especially in the global south. It must also provide efficient lending modalities – that are alive to the urgent needs of financing. Governments want quick access to finance; but the bank’s procedures can be arduous and lengthy – involving costly review processes. These drive up cost of borrowing as governments remain responsible for bearing the costs of meeting lending standards.
5. Reclaim reputation as credible source of evidence, advice and expertise: Many countries and actors still view the World Bank as a credible source of policy advise through research and its advisory and analytical services. However, government officials, and other stakeholders in borrowing countries, often feel that the bank is not adequately responsive to demands/needs when offering technical assistance and policy advise. The Bank must now listen more. It must pursue a different approach to technical assistance – moving away from one-off standalone reports (that prioritise ideas from the bank’s headquarters) to organic longer term advise (cognisant of local realities) and participatory policy making processes based on relationships built between bank staffers, government officials and other non-state actors in-country.
6. The bank must endeavour to be more accountable – to governments that seek credit and to their citizens. There is increasing demand for multilateral development banks to account to ordinary citizens, besides their clients – borrowing governments. The Wold Bank must thus commit to avail more information regarding performance and sustainability implications of their lending. This must include opening up information on their lending practices and better engagement and inclusion of non-state actors especially civil society in monitoring and verifying outcomes of their lending. Through this, the bank can be kept accountable for delivery of sound technical advice and successful projects that impact the lives of citizens.
7. Broker a new bold institutional framework or mechanism for restructuring developing world debt. Sovereign debt sustainability has come back to the fore in development financing conversations especially in developing countries. Ballooning debt stocks, looming defaults and the burden of debt servicing now limit growth and curtail ability of governments to deliver basic public goods and services like education, health and social protection. The bank must provide bold leadership in addressing the lurking question of debt sustainability in developing countries. It must broker a new deal to draw in China and Private Creditors into conversations about addressing debt distress. This must aim to facilitate concessions between The Paris Club Western Creditors, China and private creditors, where all parties accept to incur losses for the greater good. This could be configured around the G20 which China has always preferred.

Okwaroh is Executive Director and Research Associate at the Africa Centre for People Institutions and Society (ACEPIS)