Heads of multilateral development banks (MDBs) attending this year’s IMF/World Bank Annual Meetings in Morocco have pledged to strengthen their individual and collaborative actions to accelerate inclusive socioeconomic development.
To achieve a greater impact, the institutions have agreed to explore innovations to scale up financing capacity, boost climate action, strengthen co-financing and catalyse private sector engagement.
MDBs represented at Friday’s meeting included the African Development Bank, Asian Development Bank, Asian Infrastructure Investment Bank, Council of Europe Development Bank, European Bank for Reconstruction and Development, European Investment Bank, Inter-American Development Bank, Islamic Development Bank, New Development Bank and the World Bank Group.
The 2023 Annual Meetings are taking place in the Moroccan city of Marrakech, the first time in Africa after 50 years, and at a time developing nations, particularly those in Africa, urgently need more development finance to help ease strained government budgets and increasing debt levels.
“To rise to the challenge, we reiterate our commitment to make critical reforms to strengthen our financing capacity, to increase the speed and agility of our operations, and to improve the way we work together to maximise our impact as a system,” the institutions stated after a meeting on Friday.
The banks said they have identified Capital Adequacy Frameworks measures which, with strong contributions from shareholders and development partners, could potentially yield $300-400 billion in additional lending headroom over the next decade.
MDBs, working in collaboration with other development partners, can offer substantial leverage, deep knowledge and expertise, and an unparalleled proximity to governments and those most in need.
They noted that progress towards achieving the Sustainable Development Goals (SDGs) has been “painfully slow,” while climate emergencies have intensified around the globe, hitting the most vulnerable the hardest.
“We, heads of Multilateral Development Banks, recognise the collective role we need to play in response to the global challenges and the efforts that will put us on track towards achieving the SDGs,” they stressed, noting that a much scaled-up global effort is required to eradicate poverty, accelerate inclusive socioeconomic development, and tackle transboundary challenges.
At their recent meeting in New Delhi, G20 Leaders noted that the 21stcentury requires an international development finance system that is fit for purpose, putting MDBs at the centre of solutions to global challenges. They endorsed the need for “better, bigger and more effective MDBs.”
African ministers at the Marrakech meeting welcomed the G20 recognition saying that they took the vote of confidence with high responsibility and vowing to step up their individual and collective actions.
Strong Africa voice
Speaking during various sessions held during the Annual Meetings, African ministers spoke with one voice about the continent’s call for the recalibration of the global financial infrastructure to help developing nations, including those on the continent, traverse the current global economic challenges.
African Ministers restated Africa’s common position in calling for reforms at the IMF to make it more suitable to provide critical liquidity and strengthen the global financial safety net. They also reiterated the need to reform the IMF’s Special Drawing Rights (SDRs) system, the global debt architecture, the IMF quota formula and to amplify Africa’s voice and representation.
They also stressed the need for action on the issue of SDRs, which they said had been on the table for more than two years. In addition they called on donors to finalize their commitments to funding the IMF’s Resilience and Sustainability Trust (RST).
Also Read: World Bank, IMF To Undertake Joint Action Plan On Debt Reduction For IDA Countries
Fixing the ‘dysfunctional’ global financial system
In a guest essay published by the New York Times ahead of the Marrakech meetings, Kenyan President William Ruto, African Union Commission chair Moussa Faki Mahamat Faki, and the president of the African Development Bank Group, Dr Akinwumi Adesina, jointly made a case for the “dysfunctional” global financial system to be fixed.
The authors cited that during the Covid-19 pandemic, rich countries pumped trillions of dollars into their economies to support families and businesses. African governments had no such option
“Instead, their leaders kept their nations afloat by taking on more debt, which turned out to be a very expensive life raft. As a result of rising interest rates, Africa’s debt repayments will surge to $62 billion this year, up 35 percent from 2022,” the authors said.
The African Development Bank’s delegation to the World Bank/IMF Annual Meetings was led by the institution’s senior vice president Bajabulile Swazi Tshabalala, representing the president of the Bank Group, Dr Akinwumi Adesina.
Read Joint Declaration in full here.
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