Thursday, 20 June 2013
Wasting Africa’s Borrowed Money: The World Bank And The Dilemma of Duplication
The contributions of the World Bank to sub-Saharan Africa’s advancement - since the 1970s when it commenced active participation in the region - are extremely difficult to identify. Year after year, the Institution publishes reports extolling its efforts at trying to wrestle development out of the hardness of the African soil.
Often, the Reports explicitly blame Africans and their leaders as the reasons for the inability of World Bank policies to generate noticeable improvements in living standards.
It is regrettable that African leaders have failed to overhaul the precedents set by their corrupt colonial predecessors who for over sixty years made might right, and stole and siphoned Africa’s resources to the West. However, the cliché of blaming African leaders has become a smokescreen for covering up the severe policy failures of the World Bank, and the attendant difficulties it has engendered on already longsuffering Africans.
Several texts have been penned critiquing the harsh effects of the World Bank’s policies such as the Structural Adjustment Program, and the irresponsible lending to established corrupt African leaders such as late Mobutu Sese Seko, Dennis Sassou Nguesso, Gnassingbe Eyadema and several others. Very little, however, have been written on the draining effects of the duplication and fragmentation of projects and programs packaged for Africa by the World Bank.
The World Bank is an institution that runs like a closed system. Within the closed system, different departments run as closed systems. The implication of this seemingly uncomplicated statement for the lack of economic growth that persists in sub-Saharan Africa today is enormous.
In a country like Nigeria with several government ministries, agencies, commissions, establishments, institutions, tiers of governments, International NGOs, United Nations arms, diverse lending agencies, and a multiplicity of other actors, the situation becomes even more complex. The closed system of the World Bank by itself generates projects, hires consultants and executes these projects, without consulting other parties who have interest in or are actively involved that sector, program or project. What this means is that even if The Ministry of Agriculture has already spent Four Million USDollars conducting a study on the effects of the current Land Use Act on smallholder farming across Nigeria, the World Bank goes ahead to commission the same study without inquiring of the Ministry of Agriculture regarding the prior existence of such; it could bill the Nigerian government Eight Million Dollars for the same study.
The implication is that Nigeria ends up “borrowing” another Eight Million Dollars from the World Bank to fund an already existing report gathering dust on the shelves of the Ministry of Agriculture.
In a striking example of this ineptitude, in 2008, a particular World Bank funded study on Sustainable Land Management was discovered to have been conducted only about a year earlier by the New Partnership for Africa’s Development (NEPAD). This discovery came about only after Nigeria had borrowed money, paid millions of dollars to several expatriate consultants from the World Bank to conduct a fresh study and submit reports to the Ministry of Agriculture.
To forestall this wastage, India has banned several “donors” (donors? This is borrowed money. Why should the term donors be used to refer to institutions who are actively engaged in promoting their businesses?) from operating in their country. In Africa, Rwanda is about the only country known to insists on coordinating donor funds to avoid duplication. The country had to ask certain donors to leave their shores at some point in their recent history, for failure to cooperate with the government in harmonizing development efforts.
The very high transaction costs due to the lack of coordination of the World Bank and other agencies’ operation in Africa has resulted in several international resolutions. The Paris Declaration on Aid was endorsed in 2005 and the Accra Agenda for Action in 2008. Both agreements adjoin lenders and recipients to own, align, harmonize and be mutually accountable for the giving and receiving of Aid. As the agreement is non-binding, it has been established that the World Bank and other lending agencies are clearly flouting the terms of this agreement, at least in sub-Saharan Africa. African governments on their part have failed to put the necessary structures in place to ensure the implementation of these agreements.
Moreover, in lending to African countries, the World Bank hardly consults various governments to determine their country’s needs. The World Bank officials decide the projects that the country needs, and lends money for that particular project. At the end of the day, a huge percentage of these borrowed funds go back to the consultants from the lending countries who are paid exorbitant fees and accommodated in the most expensive hotels for months, with no plans for sustainability of the project once the consultants depart. Importation of relevant machinery and products are also sourced from these lending countries and there are often no provisions made for the maintenance of the imported machinery in the event of break down.
In a pretentious effort at presenting a project as a joint effort of the government of (say) Nigeria and the World Bank, the wordings are aptly crafted to convey ownership. Sentences like “Government of Nigeria has requested the World Bank to…” are liberally applied throughout a project document. In reality, there is no request from Government of Nigeria and it is only the World Bank covering its back, knowing that it is wrong to craft policies in Washington D.C. and impose same on a sovereign country.
A progressive country like Rwanda now insists on telling the donors what to fund and what not to fund. At the 9th National Dialogue that held in December 2011, President Kagame clearly rejects the pressure from the World Bank and other agencies to dictate to his country when he said that, “some people think they have the capacity and knowledge to define what is good for us. I say nonsense.” Indeed, it makes no sense the way the World Bank and other lending agencies tell African countries when to borrow, what to borrow, and how to borrow. It is incomprehensible that the funds being borrowed are to be used in funding projects that are unnecessary, often irrelevant to the immediate development needs of the masses. It is unintelligible that hugely capital intensive projects are conducted without due diligence, leading to money being borrowed to produce duplicates.