27 April 2007
The World Bank produced a progress report on its Africa Action Plan in advance of the Spring Meetings in Washington, DC earlier this month. How has the Bank measured up to its commitments, and what should Africa expect moving forward?
The World Bank’s Africa Action Plan (AAP) was at the top of the Development Committee’s official agenda when it convened in Washington, DC in mid-April. While the Wolfowitz scandal distracted from the substantive issues, the Spring Meetings of the institution's governing bodies nevertheless provided an opportunity for reflection on the Bank’s operations and impacts in Africa.
The discussion centered around a mid-term progress report on the implementation of the AAP. The AAP was initially commissioned by the G-8 during the Gleneagles Summit in July 2005, where donors promised a doubling of aid to Africa by 2010 – a commitment they have yet to fulfill.
The Bank’s progress report acknowledged that the original action plan was too broad and prescribed too many components for it to be an effective management tool. As a result, the Bank has proposed revisions to the plan which narrow its focus to eight “flagship” areas: (i) strengthening the private sector; (ii) women’s economic empowerment; (iii) building skills for competitiveness in the global economy; (iv) increasing agricultural productivity; (v) improving access and reliability of clean energy; (vi) expanding road networks and transit corridors; (vii) increasing access to safe water and sanitation; (viii) strengthening health care systems and the fight against malaria and HIV/AIDS.
Achievements?
Among the “achievements” cited in the mid-term report are the Bank’s facilitation of more economic reforms to further open up Africa’s economies to international trade and the expansion of the Bank’s infrastructure and health programs on the continent.
However, the progress report acknowledges that despite improved economic growth on the continent, particularly in resource-rich countries, current trends will not be enough for most countries to make significant headway toward meeting the Millennium Development Goals (MDGs) by the target deadline of 2015.
Business as usual
Beyond some new terminology and repackaging of ideas, both the original AAP and the revised strategy laid out in the recent progress report read more like blueprints for “business as usual” than innovative approaches to fighting poverty in Africa.
The thrust of the Bank’s program in the continent remains to boost economic growth through promotion of private investment and an “export push.” Under the rubric of strengthening the African private sector, the Bank continues to stress the need to “improve the investment climate” for the benefit of both foreign and domestic investors, and to increase African enterprises’ access to credit and equity, drawing little distinction between the kinds of investments that may help reduce poverty and those that may just help produce profits.
While the core of the Bank’s strategy remains the same, some shifts in emphasis between the original action plan and the proposed revisions presented in the April progress report merit a closer look.
Extractive industries as driver of growth
In its proposed revisions to the action plan, the mid-term review places greater emphasis on extractive industries than did the original document. In addition to highlighting the Bank’s ongoing support for the Extractive Industries Transparency Initiative (EITI) in mineral-rich countries, the progress report argues that natural resources should be actively promoted as a driver of growth in the region, particularly in light of high commodity prices.
The report also outlines plans for increased IFC equity investment in extractive industry companies operating in Africa, as part of the World Bank Group’s emphasis on strengthening the continent’s private sector. Reuters recently reported that the IFC expects new commitments in sub-Saharan Africa to reach $1 billion during the current fiscal year, citing improvements in many countries’ business climates. Much of this increase is expected to come from projects such as the Bujagali Dam in Uganda, as well as the Lonmin platinum project in South Africa approved by IFC’s Board of Directors earlier this year.
What about the environment?
While the environment was virtually absent from the original Action Plan, the progress report does briefly mention the need for better environmental management in Africa. However, it still fails to emphasize the fundamental connection between environmental degradation and impoverishment on the continent, and lacks specifics regarding future Bank support for environmental initiatives or for the integration of environmental considerations into the selection and design of Bank operations and private sector investments.
Agriculture, but scant attenton to land rights or global market issues
The Bank’s increased emphasis on agricultural productivity (and related infrastructure) in Africa continues to prioritize production for export over supply of local markets, and stresses research and technological solutions, while giving little attention to issues of land rights and resource control.
Perhaps most importantly, it remains unclear how the measures outlined by the Bank will address structural impediments in the global economy that put African farmers at a disadvantage, whether competing with cheap imports in their own and neighboring countries on the continent, or trying to enter markets overseas.
Privatization of basic services
Another troubling trend emerging from Spring Meeting dialogues with Bank and IFC officials is the institutions' renewed emphasis on private sector provision of health and education services.
The Africa Action Plan progress report proposes increased support for private “post-primary” education institutions in Africa, modeled on the successes the Bank claims to have achieved through its primary education programs. At the same time, the IFC has expressed interest in supporting private health and education services in Africa.
These statements have revived concerns that user fees charged by for-profit companies will keep basic services beyond the means of the continent’s poorest and most at-risk populations.
Final quarter push
One issue not featured in the Bank’s press releases and largely passed over by the media is the Bank’s push to approve massive sums of money for projects in Africa during the last months of this fiscal year. As reported in Bua News, Wolfowitz told journalists that the World Bank is on track to surpass last year’s lending to Africa, and is “looking at numbers $5 billion or higher” for the current fiscal year.
However, as of the Spring Meetings, the Bank had lent less than $2 billion to Africa since the start of the current fiscal year in July 2006. In mid-March, a press release from Government Accountability Project (GAP) warned that the World Bank might attempt to push through over $3 billion worth of projects to Africa in the remaining 3 ½ months of the fiscal year in order to meet its commitments. GAP insisted that this “could only be accomplished if serious shortcuts are taken,” since nearly half of the proposed projects were still only in the concept stage, and added that Bank staff members had voiced concerns that the quality of the loans would suffer.
Nearly half of the $3.2 billion the Bank aims to allocate to Africa before June 30 is for projects in the energy and transportation sectors. If the proposed loans are not subjected to a thorough safeguard review process, the environmental and social consequences for affected communities in Africa could be severe.
Resources
- Wolfowitz highlights African strides before Spring Meetings by Lavinia Mahlangu, Bua News (South Africa), April 13, 2007 (BuaNews website)
- African growth too slow to erase poverty by 2015 by Ethel Hazelhurst, Business Report, April 12, 2007 (Business Report website)
- Africa business environment greatly improved – IFC by Tom Kirkwood, Reuters, April 12, 2007 (Reuters website)
- World Bank lending to Africa plummets, Global Accountability Project, March 14, 2007 (GAP website)
- The Africa Action Plan - Planning for the "Decade of Africa," World Bank, September 8, 2005 (World Bank website)
- The Africa Action Plan, World Bank, September 2005 (World Bank website) (Acrobat PDF 821 KB)
- Bank hones plan to accelerate progress in Africa, World Bank, April 9, 2007 (World Bank website)
- Accelerating Development Outcomes in Africa: Progress and Change in the Africa Action Plan, World Bank, April 6, 2007 (World Bank website) (Acrobat PDF 406 KB)