At a World Bank/International Monetary Fund (IMF) forum held in February in Washington, David Malpass cited the activities of the Asian Development Bank (ADB), the African Development Bank (AfDB), and the European Bank for Reconstruction and Development (EBRD), criticizing them for a “tendency to lend too quickly and thereby aggravate the problem of country debt”.
His criticism of the AfDB specifically concerned Nigeria and South Africa, and he called for “greater coordination among international financial institutions to coordinate lending and maintain high standards of transparency”.
A statement that goes “against the spirit of multilateralism”.
The pan-African institution did not let the criticism go without a response.
On 13 February, it issued a press release denouncing the “misleading and inaccurate” statements, which, it said, “calls into question the integrity of the African Development Bank, undermines our systems of governance and wrongly insinuates that we operate according to different World Bank standards. The very notion runs counter to the spirit of multilateralism and our collaborative work”.
The World Bank went on to say, “has much larger [credit] operations in Africa than the African Development Bank,” citing that the Bretton Woods institution has approved $20.2 billion in financing in 2018, compared to $10.1 billion from the AfDB.
The AfDB pointed out that Nigeria and South Africa have outstanding loans from the World Bank for fiscal year 2018 of $8.3bn and $2.4bn respectively, and $2.1bn and $2bn from the AfDB.
“Our Bank recognizes and closely follows the upward trend in debt. However, there is no systemic risk of over-indebtedness,” she added.
“The lending, policy and advisory services of these development institutions in their respective regions are often coordinated and offer better value for money to developing countries compared to other sources of financing,” the AfDB statement said, adding that its AAA status enables it to obtain financing on very competitive terms and to offer favourable conditions to its regional member countries, whose substantial financing needs “remain vitally important”.
Close collaboration
The media release also stated that in terms of transparency, “our institution was ranked 4th most transparent institution in the world by the 2018 Publish What You Fund report”.
As a parting shot, the AfDB referred to the issue of inter-institutional coordination, stating its operations were managed “in close collaboration with its sister international financial institutions (notably the World Bank and the IMF).”
“We believe that the World Bank could have explored other platforms [than this public statement] to discuss debt problems and the functioning of the multilateral development banks,” the statement concluded before once again castigating Malpass for making “false and inappropriate” statements.
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