The African Development Bank (AfDB) has faulted a recent comment by the President of the World Bank, David Malpass.
Malpass, was recently quoted as saying some multilateral development banks, including the AfDB, have a tendency to lend too quickly and in the process, add to the continent’s debt problems.
However, the AfBD in a statement, said Malpass comment was inaccurate and not fact-based.
“It impugns the integrity of the African Development Bank, undermines our governance systems, and incorrectly insinuates that we operate under different standards from the World Bank. The very notion goes against the spirit of multilateralism and our collaborative work.
“For the record, the African Development Bank maintains a very high global standard of transparency. In the 2018 Publish What You Fund report, our institution was ranked the 4th most transparent institution, globally,” it stated.
The Bank said it provides a strong governance program for its regional member-countries that focuses on public financial management, better and transparent natural resources management, sustainable and transparent debt management and domestic resource mobilisation.
“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,” he added.
The statement explained that the AfDB’s Africa Legal Support Facility (ALSF) supports countries to negotiate terms of their royalties and taxes to international companies, and terms of their non-concessional loans to some bilateral financiers.
“We have been highly successful in doing so. These are the facts: The World Bank, with a more substantial balance sheet, has significantly larger operations in Africa than the African Development Bank. The World Bank’s operations approved for Africa in the 2018 fiscal year amounted to US $20.2 billion, compared to US $10.1 billion by the African Development Bank.
“With regard to Nigeria and South Africa, the World Bank’s outstanding loans for the 2018 fiscal year to both countries stood at US $8.3 billion and US $2.4 billion, respectively. In contrast, the outstanding amounts for the African Development Bank Group to Nigeria and South Africa were US $2.1 billion and US $2 billion, respectively, for the same fiscal year.
“With reference to the countries described as ‘heavily indebted,’ our Bank recognises and closely monitors the upward debt trend. However, there is no systemic risk of debt distress,” it added.
According to the 2020 African Economic Outlook, at the end of June 2019, total public debt in Nigeria amounted to $83.9 billion, 14.6 per cent higher than the year before. That debt represented 20.1 per cent of GDP, up from 17.5 per cent in 2018. Of the total public debt, domestic public debt amounted to $56.7 billion while external public debt was $27.2 billion (representing 32.4% of total public debt).