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DRC is ‘moving in the right direction’ says World Bank’s Hafez Ghanem

By Stanis Bujakera Tshiamala
Posted on Monday, 29 November 2021 15:52

World Bank vice president Hafez Ghanem met with President Félix Tshisekedi in Kinshasa in early November © Hafez Ghanem/Twitter

The World Bank, which is satisfied with the progress that the DRC has made in terms of governance and economic reforms, plans to accelerate its financing projects, its vice-president, Hafez Ghanem, tells The Africa Report.

Egypt’s Hafez Ghanem, the World Bank Group’s regional vice president for Eastern and Southern Africa, visited the DRC on 11 and 12 November, accompanied by Sérgio Pimenta, regional vice president for Africa at the IFC, a subsidiary dedicated to the private sector. During their stay, the Washington-based executives met with President Félix Tshisekedi, Prime Minister Sama Lukonde Kyenge, and Finance Minister Nicolas Kazadi to discuss the DRC’s development priorities and launch the $500m Kinshasa Multi-Sector Development and Urban Resilience Project, ‘Kin Elenda’.

Speaking to us,  Ghanem unveiled the World Bank Group’s priorities in the DRC, where the institution’s portfolio includes 20 projects that are being implemented (two of which are regional in scope) for a total of $5.21bn.

What is the DRC’s greatest challenge in terms of good governance today? 

Hafez Ghanem: I will try to highlight four aspects of governance. The first is financial management, which we have stressed is important – it is essential that public finances are managed transparently.

Good governance is also about mobilising resources, always in an unambiguous way. Good governance also means optical project management, taking into account the need to decentralise in order to be as close as possible to a country’s citizens. Finally, fighting against corruption is a key issue.

How does the World Bank intend to help the DRC on these issues?

We are looking at the possibility of setting up a project to support decentralisation. I feel that the DRC government is showing a willingness to really improve governance, and we will work hand in hand to help them in this area. This will obviously not be easy. We are not going to change habits overnight, but we have to start somewhere.

What practices do you think need to change?

The DRC, just like other countries, has a tendency to withhold information, which can be described as lack of transparency. These countries feel that everything should remain secret, that the administration should keep everything to itself and not be held accountable, but the best way to fight bad governance and get rid of corruption is by being open and honest!

Transparency is how people are held accountable for their actions. When you turn on the light, corruption disappears.

One of the projects you support is free primary education. In this case, the World Bank had to suspend its funding for this programme as there were suspicions of misappropriation of funds. This decision was eventually lifted. Did you get any guarantees from the authorities?

There are two points to consider in this case. The first is that the government itself brought the management and governance problems linked to this programme to our attention. As a result, we have decided to suspend all payments until this problem is resolved. Secondly, from our point of view, free education is a very important programme in a country like the DRC.

Our goal is to provide education to all Congolese children, especially girls. Empowering women is a very topical issue and it is impossible to do so without education. There is now a 20% increase in the number of students that attend schools, and these are mostly girls. That’s why it’s important that we support this programme.

The new ‘Programme de désarmement, démobilisation, relèvement communautaire et stabilisation (P-DDRC-S)’ [Disarmament, demobilisation, community recovery and stabilisatin] one of the government’s priorities this year. Does the World Bank support it? 

We are preparing a project that aims to reintegrate young people into economic life. It is worth $250m and covers North and South Kivu as well as Ituri. We will present it to our board next month and then implement it as soon as it is approved. Security is important, but the long-term solution is development. That is what we will try to do.

What is the current status of the projects that the World Bank has developed? 

The World Bank has noticed that the Congolese government is introducing important reforms and presenting a coherent vision for infrastructure investment. We are making progress on providing universal access to electricity and the Internet, empowering women and investing in human capital. The authorities have assured us that they are willing to legislate in order to attract private investment and improve governance.

We at the World Bank believe that the DRC has understood the benefits of this collaboration and that it is moving in the right direction. We want to support these reforms and investments. To this end, we will increase the scope of our interventions. Last year, we financed projects worth $1.5bn in the DRC. This year, we will reach just over $2bn. We have also changed how we allocate projects. Previously, we focused on the social sectors (education, health, social protection).

Today, although we will of course continue to support these sectors, we will also work with the government to create jobs and transform the economy. This involves investing in physical infrastructure, particularly in our road programme, the first phase of which amounts to around $500m. Two additional phases are planned.

Why are you fast-tracking projects? 

This is our response to the government’s reform programmes. We have decided to fast-track our projects because they are being rolled out better than before and we see that there are reforms underway. The government is aiming to create a lot of jobs and provide training opportunities to Congolese youth. To achieve this, we need economic reforms, an improved legal framework, but also physical investments (roads, electricity, internet, etc.) and investments in human capital.

What about the Inga 3 hydroelectric mega-project?

For the moment, we are not involved in the Inga 3 project because the government did not ask us to be. The authorities, in view of the DRC’s hydraulic potential, have asked us to develop renewable energies. There are many other hydraulic power stations that can be developed. The same goes for solar energy. We are working with the government to bring these resources to fruition.

The country’s objective is to increase the rate of access to electricity by a factor of five, from less than 20% today to 100% within eight years. This requires significant investment, both public and private. This is what we are working on, not only in electricity, but also in the digital economy.

Foreign exchange reserves have been strengthened in recent months. Is this enough to cope with external shocks?

Two tools help reduce a country’s vulnerability to exogenous shocks. The first is economic diversification. Countries that depend on only one or two products are much more vulnerable to disastrous scenarios. The DRC not only has mining resources, but also great agricultural, tourism and industrial potential.

The second tool, which will help make the economy more resilient, is effective macroeconomic management. Knowing how to manage one’s budget well and ensuring that state expenditure is invested in profitable projects is the best defence.

The DRC ranked quite low in the Doing Business rankings, which has since been discontinued. How can we improve the country’s perception among investors?

Reforms are needed to create an incentive-based regulatory framework for investment and labour. Fair laws and good regulations are of course desirable, but they must be properly enforced. Similarly, the whole world needs to know what is happening in Africa. I often feel that the world is not sufficiently aware of all the reforms that most African countries have carried out, especially during this period of Covid-19, which has been a productive one.

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