We crack open the vault of the World Bank to reveal everything you need to know about the changes on the horizon for this storied, but stodgy, institution.
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Also in today’s edition: ONE enters its third decade with a new leader and a new strategy.
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World Bank evolution
Most people generally agree the 80-year-old World Bank could use a facelift for the 21st century, and there’s no shortage of opinion, speculation, and even wishful thinking on what those reforms should look like.
But what exactly do we mean when we say reforms?
A lot of ink has been spilled on the debate over reforms, but not as much on explaining what those reforms actually entail. Fortunately, Devex contributing reporter Sophie Edwards has both the expert and layperson covered with an in-depth examination of the changes in store for the World Bank.
Two of the biggest changes include calls for the bank to focus more squarely on climate change, alongside a push to absorb more risk and stretch the balance sheet — without jeopardizing the bank’s pristine AAA credit rating.
Its new vision statement — to “create a world free of poverty on a liveable planet” — subtly telegraphs the changes already underway. Said to be the brainchild of the bank’s new president, Ajay Banga, who took over last June, the phrase “on a livable planet” is code for climate change.
The bank needs the euphemism, Sophie writes, because of tensions between Western donors’ desire to see a sharper focus on climate change and borrower countries’ concerns that the bank’s resources will be diverted from their own priorities, namely poverty alleviation.
Another priority is squeezing more lending out of the bank’s balance sheet instead of asking donors for fresh capital. Major shareholders are keen to avoid a capital increase — where they pay in more money and also redistribute shares — mainly because domestic budgets are tight and the United States wants to make sure China doesn’t increase its voting share. But many experts say that no amount of balance sheet wizardry will make up for an infusion of cold, hard cash.
Other challenges include replenishing a fund for the lowest-income countries, streamlining the way the bank does business, and crowding in those famous billions to trillions in private investment.
Read: Everything you need to know about the World Bank's reform plans (Pro)
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ONE big step
As ONE enters its third decade, the D.C.-based global advocacy organization has enlisted its first African-born leader to helm the organization at a time of transformation and turbulence.
Ndidi Okonkwo Nwuneli, a Nigerian American expert on food systems and entrepreneurship, will serve as the new president and CEO starting April 2, my colleague Michael Igoe reports.
Nwuneli succeeds Gayle Smith, ONE’s longest-serving CEO, who stepped down in January. Its president, Tom Hart, has also left, and at the end of 2023, musician and ONE co-founder Bono stepped down from the board of directors after two decades, although he remains involved with the organization.
“An organization that focuses on Africa should be led by an African, that’s always been our dream, and Ndidi is the right person to take ONE into the future,” Bono said in a statement Tuesday.
Nwuneli arrives at ONE amid a strategic review aimed at elevating African voices that will see roughly 50 positions — or about 30% of its staff — eliminated.
Much of Nwuneli’s career has centered around transforming food systems to improve access and sustainability. Her advocacy has focused heavily on the role of the private sector in fostering that transformation.
“Governments can create an enabling environment … civil society and foundations can come in with catalytic funding, but ultimately it’s the private sector that will implement and ensure demand-driven, long-term solutions — because we have to make business sense,” she said at a 2021 event hosted by Devex.
Read: ONE announces its first African CEO
ICYMI: ONE to cut 30% of staff in strategic shift
From the archives: A Q&A with Nwuneli on the challenges of scaling impact in Africa
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Unreasonable
While offering high praise for the U.S. International Development Finance Corporation, Andrew Herscowitz, executive director of ODI North America, is unsparing in his assessment of DFC’s shortfalls.
“DFC has become the U.S. government agency everyone expects to counter China and Russia, while also lifting millions out of poverty,” he writes in an opinion article for Devex, noting that it has been delivering on those lofty expectations. “Yet while I worked at DFC, many of us became frustrated that we had to turn away projects for what seemed like a new reason every day.”
“If the project is in a country that does not adequately protect workers’ rights — e.g., Thailand, Bangladesh, Sudan — then DFC can’t support it,” he points out. “If the project involves natural gas, unless it’s in Europe, where DFC has special authority to finance energy projects meant to counter Russia, DFC probably can’t support it.”
“What about a railway? Well, if a government entity owns the railway, it’s likely to be a ‘no go,’ unless there’s a concession to a private company to run the railway. But that’s not stopping China from financing roads, railways, and other infrastructure,” he warns.
If you think that’s a lot of examples, consider the fact that DFC’s website lists over 100 countries where it cannot do business for all kinds of reasons.
Opinion: How the US DFC is stuck in a carnival game
Keeping score
How is the Europe-Africa relationship going? We are old enough to remember the February 2022 European Union-African Union summit in Brussels, where leaders swore they were determined to follow up on all of their promises.
But who would do the monitoring? AU negotiators were wary of the newly created Africa-Europe Foundation, arguing that existing EU-AU processes could do the job. But the EU side created a role for the AEF anyway, and the foundation has just issued a lengthy study on what’s happened in the past two years, my colleague Vince Chadwick tells me.
The report cites progress such as investment in local vaccine manufacturing in Egypt, Ghana, Nigeria, Rwanda, Senegal, and South Africa. In addition, a €450 plan to combat illicit financial flows (think corruption and tax evasion), which saps an estimated 3.7% of Africa’s gross domestic product each year, is due to be launched this year.
There is also a mixed take from the huge German development agency GIZ on so-called Team Europe initiatives — the European Commission-driven effort to get EU countries, development banks, and the commission all working together in a limited number of sectors in low-income countries, to achieve large-scale, visible change.
GIZ argues that these joint initiatives can mean more efficient resource allocation and better use of donors’ different expertise. But among other things, they warn that “challenges persist in coordinating and communication about regional and continental TEIs that lack a natural ‘country host’” and that “the role of traditional partners involved in development cooperation, such as CSOs and NGOs, also remains unclear.”
A work in progress then.
Background reading: ‘Demotivating,’ ‘a mess’ — study debunks Team Europe plans (Pro)
In other news
Houthi militants have fired at a ship carrying humanitarian aid to Yemen, according to U.S. Central Command. [MSN]
The World Food Programme has suspended aid deliveries in northern Gaza over security concerns, deepening starvation in the region where 1 in 6 children are acutely malnourished. [AP]
The U.N. Central Emergency Response Fund has allocated $100 million to support humanitarian efforts to underfunded crises in seven countries. [Reuters]
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About the author
Anna Gawel
Anna Gawel is the Managing Editor of Devex. She previously worked as the managing editor of The Washington Diplomat, the flagship publication of D.C.’s diplomatic community. She’s had hundreds of articles published on world affairs, U.S. foreign policy, politics, security, trade, travel and the arts on topics ranging from the impact of State Department budget cuts to Caribbean efforts to fight climate change. She was also a broadcast producer and digital editor at WTOP News and host of the Global 360 podcast. She holds a journalism degree from the University of Maryland in College Park.
