Bamidele Famoofo
Ajay Banga, president of the World Bank Group
President of the World Bank, Ajay Banga has said since the April springs meeting several reforms have occurred at the institution.
He said when he came on board sixteen months ago he was given a mandate by the shareholders and clients to engineer the evolution of the institution with the dedicated workers within the bank, and has since been on a journey to lead what he referred to as a “Better Bank”.
Ajay said meaningful improvements had been achieved across the institution, saying there is more work to be done but the team is moving in the right direction.
He said he was mindful of the fact that there would be constant change because the world is rapidly shifting in its landscape and the Bank has no choice but to gather speed to be a faster and better Bank, noting that the average project time in the Bank has been decreased from 19-16 months and they are working towards a 12 month end, and the results are beginning to manifest.
The Bank according to the him is using a platform approach and the team has a set of health projects that has similar characteristics in Burundi and the DRC, Malawi , Rwanda and Zambia within 100 days each with the DRC and Burundi actually setting the pace with 30 days of prep time.
In the pacific region, according to him, there is a correspondent banking support project among seven countries that was approved under 12 months adding that there are other projects that are taking longer, but the average is reducing which is the goal of the Bank.
The second task of being a better bank is in the simplicity. “Earlier this year, we appointed 20 joint country representatives across IDA, IBRD, IFC, MIGA which has been going well with the approach expanded. While it’s still early, we are already seeing this shift spark a new level of collaboration among management and staff, and the feedback from countries has been encouraging.”
“ We have also continued our work to widen and deepen partnerships with other MDBS. We have specific projects we are working on with the InterAmerican Development Bank, IADB, Islamic Bank, African Development Bank, European Bank for Reconstruction and Development and Asian Infrastructure Investment Bank.”
He said across a set of 10 MDBs, the bank had produced an online co-financing platforms that allow a MDBs to easily share projects for joint financing and discuss them securely and transparently.
The result of the platform according to him, has reduced administrative burden and trancastion costs, better-coordinated financing and ultimately greater development impact.
“ In just 6 months, we have 85 project in the pipeline and some starting to be financed. The first ferry are starting to be financed. We have overhauled our knowledge bank structure, you’re aware of that. We have people in place now leading each vertical for the entire institution. Those verticals, to remind you, are people, planet, prosperity,infrastructure and digital. Each have clearly defined expertises, but they are bound by a common mandate, and that mandate is to take our knowledge expertise to the fore front of our country driven model. They should participate in the creation of country partnership frameworks.”
The second pillar of the Better Bank were measures that will boost lending capacity and make loans from IBRD more affordable for middle incomes countries and the two key elements announced were lowering minimum equity to loan ratio from 18% from 19% noting that it was from 19% ,20% before the Springs Meetings last year.
He said this was generating a lending capacity, staying together with all the prior actions on balance sheet optimization, which is the equity loan ratio, but also the new financing instruments that have been funded by shareholders, the bank has achieved about $150 billion in additional financing capacity over this coming decade.
According to him, the work continues to find other improvements and additional optimization in the Bank’s balance sheer at IBRD noting that the Bank has equally taken substantial action on the pricing of IBRD loans to ensure that middle income countries that borrow from the Bank will be able to do so on better terms.
“I think that will help countries like India and Indonesia, Turkey, even states within India. When more affordable financing is paired with World Bank knowledge, what this does is create a powerful engine for development. Part of the pricing adjustment allows small states which are already eligible for climate resilient debt clause that you’re aware of to borrow at the lowest tier of pricing that we offer at IBRD.”
