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Africa Group 1 Constituency
1
Annual Report 2015
Annual MeetingsLima, PERU.
October 8th 2015
Presented by: Louis, Rene, Peter, LAROSEEXECUTIVE DIRECTOR
1. Introduction,2. Matters Arising from the Previous Minutes – April 15th - 20153. Developments in the Global Economy and Future Outlook, 4. World Bank Group Operations for the Year 2015 with a focus on SSA and our Constituency, 5. Update on New Development Challenges Facing some SSA countries,6. Update on Selected Bank Policies and Programs,7. Future Plan and Constituency Outreach Activities,8. Acknowledgements, and9. Questions & Answers
F = FollowO = OneC = CourseU = UntilS = Successful
2015AnnualReportFY2015
Financing for Development
Dialogue on FinancingFor Development
(January 2015)
Addis Ababa ActionAgenda
(July 2015)
Sustainable DevelopmentGoals (SDGs)
(September 2015)
Paris –UN FrameworkConvention on Climate Change
(COP21) (December 2015)
Towards a universalClimate Agreement.Endorsement by UNGeneral Assembly
Illicit FinancialFlows US$50 bn
193 Countries committedto Global Framework forFinancing SustainableDevelopment
New paradigm shifts inFinancing for Development“from Billions to Trillions”
Leakages out of Africa.
Domestic Resource
Mobilization
Matters Arising
4
WBG – Financing For Development
5
Matters Arising
6
Update on Environmental and Social Safeguards Framework (ESSF)
The main objective of ESSF is to strengthen the effectiveness of the Safeguard Policies in order to enhance the development impact ofWBG-supported projects.
First draft was presented in Khartoum, Sudan in August 2014. The Revised 2nd Draft waspresented in Luanda, Angola in August 2015 at the African Caucus Meeting.
Revised 2nd Draft still has contentious points in terms of; Use of Indigenous People terminology, LGBT, Human Rights, FPIC, Cost of ImplementationFurther consultations will be made in some of our Constituency countries
Update on Proposed WBG Procurement Framework
The Framework is to modernize the CURRENT Procurement System.Framework was approved by the Executive Board in July 21st 2015 AFTER consultations with our Countries.
It takes into consideration: (i) value-for-money, (ii) efficiency, (iii) integrity, (iv) avoidance of unfair competitive advantage, and (v) alternative arrangement (i.e. Country System).It will become effective in January 2016. A Trust Fund will be used to pay for Capacity Building forcountries with low capacity.
7
Update on 2015 Voice ReformsInternal consultations started in February 2015 on IBRD and IFC Shareholding Review in line with theIstanbul Principles agreed by Governors in 2010.During this IMF/WBG Annual Meetings the Voice Reforms will be discussed that is, enhanced Voice and Participation of Developing and Transition Countries (DTCs) in WBG. This is to ensure that the voting rights of the Developing & Small countries are preserved.The reforms take into consideration;(i) Growth in per capita income; (ii) population
growth;It is expected that when the SCI has been completedDTCs voting powers will increase from 47.2% to 52.7%.Next Steps (i) need for a Roadmap for the WBGon its future role in the international financialarchitecture and need for concessional finance. (ii) consider SCI for IBRD and IFC for 2017 SpringMeetings, and (iii) decision to be reached in 2017 IMF/WBG Annual Meetings.
Update on IDA ReformsIDA is going through a Reform Process to expandthis facility to meet growing demand from clients.
Key Principle for IDA Financing* Need to secure long-term partners’ commitment for
future replenishment (i.e. IDA 18 Replenishment)* Avoid crowding out IDA clients from limited resources
IDA 17 Non-Concessional Scale-up FacilityThis facility will provide an initial response to help meetClients demand in IDA 17 (estimated US$ 5 billion)
Leveraging IDA’s Equity• IDA+1 option – Funding cost would be higher than IBRD
by 35bp* IDA+2 option – Lower borrowing costs than IDA+1
IBRD Lending to IDA Countries with IDA Guarantees*This is an interim approach to support growing demandsfrom IDA clients for Non-concessional lending.*Management is to develop the proposal further.
8
Update on the Global Infrastructure Facility (GIF)Update on Global Infrastructure Facility (GIF)
The Unit is now OPEN
for business
GIF is a global platform that facilitates thepreparation and structuring of complexinfrastructure PPPs to enable mobilizationof private sector and institutional capital.
We expect meaningful actions from WBG management to meet the demand of our infrastructureneeds in our Constituency and Africa.
9
70+ African Professionals
Developments in the Global Economy
* Commodity prices have declined sharply over the past 3 Years.
* Output growth has slowed considerably among the emerging and developing
economies that are net exporters of oil and other commodities.
* Recent exchange rate movements have been unusually large, triggering a debate
regarding their likely effects on trade.
* Global value chains has weakened the relationship between exchange rates and trade in intermediate products.
* China's slowdown is having an impact in the global economy.
Real GDP Growth in Developing Countries(Percentage change from previous Year)
5.1
6.3
7.1
4.2
0.5
3.7
2.7
4.6
6.9
6.9
4.6
2.2 2.
4
0.9
4.4
7.1
6.7
4.2
2.2
1.8
0.4
5.2
7.3
6.7
4.6
3.7
3.4
2.0
5.4
7.5
6.6
5.0
3.8
3.6
2.8
ALL DCS SOUTH ASIA EAST ASIA AND PACIFIC
SUB-SAHARAN AFRICA
MIDDLE EAST AND N. AFRICA
EUROPE AND CENTRAL ASIA
LATIN AMERICA AND
CARIBBEAN
2013 2014e 2015f 2016f 2017f
11
Economic Growth in the Developing Countries
Source: World Bank Database
Real GDP Growth for Sub-Saharan Africa (SSA)(Percentage change from previous Year)
4.14.2
4.6
4.2
4.6
5.0
4.7
6.0
5.7
5.0
5.4
5.8
4.9
5.1
4.6
4.4
5.2
5.4
2012 2013 2014E 2015F 2016F 2017F
All SSA GDP growth All SSA GDP growth, excl. South Africa Developing Countries
12Source: World Bank Database
What Policymakers May Need To Do?
*Growth in advanced economies increased to 2.5% (2013), 2.6% (2014) and projected
to increase to 2.8% (2015).
* In developing countries, demand support should come from fiscal policy rebalancing aimed at boosting longer-run growth, through tax reform and spending reprioritization.
* Structural reforms to raise productivity and remove bottlenecks to production are
URGENTLY needed in many countries.
* Refugee crisis in many parts of the world will have significant adverse impact ondeveloping countries, in terms of assistance, which developed countries will offer
* Natural disasters and Health Epidemics will add new challenges to SSA Region
* Our Authorities will have to consider requesting Budgetary Support from IMF and WBG.
14
World Bank Group Operations for the Year 2015 with a focus on SSA Region & Constituency
*IBRD *IDA*IFC*MIGA
a) IBRD commitments increased in all regions in FY15, most notablyin SSA, which almost tripled to US$1.2 billion.
b) IDA commitments declined in all regions except for SSA, wherethey rose slightly from US$10.2 billion in FY14, to US$10.4 billionin FY15.
c) IFC’s investment commitments in SSA region is increasing. This isa very good sign that IFC is showing greater commitment to ourregion. However, we need MORE investments in our privatesectors to allow them to be the ENGINE OF GROWTH.
d) As for MIGA, more support is being provided in guaranteesmainly in our agricultural sector. The Agency must also scale-uptheir risk insurance investments, if the World Bank Group is tomake any meaningful difference in our region.
0
2
4
6
8
10
12
FY12 FY13 FY14 FY15
7.58.2
10.611.6
US$
bill
ion
IBRD & IDA COMMITMENTS
Trend in Resource Flows to SSA during the last 4 Years – FY12 – FY15
5.5
6
6.5
7
7.5
FY12 FY13 FY14 FY15
6.2 6.2
6.9
7.4
US$
bill
ion
IBRD & IDA Disbursements
Source: WB Quarterly Business & Risk ReviewQ4 – FY15 – September 30th 2015
Africa Group 1 Constituency GDP Growth Rates (%)
-15.0 -10.0 -5.0 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0
All SSAEthiopia
MozambiqueTanzaniaRwanda
KenyaZambia
NamibiaUgandaMalawiBurundi
LiberiaBotswana
LesothoGambia, The
SeychellesSudan
SwazilandEritrea
ZimbabweSouth SudanSierra Leone
2014e 2015f
16Source: World Bank Database
17Source: Southern Africa Facing a Perfect Storm? – Africa Region – September 2015
Domestic Constraints
Regular Power Outages Regular Water Shortages Domestic Policy Uncertainty
* Botswana * Botswana
* Namibia
* South Africa * South Africa * South Africa
Investment Act. Tourism & Visas, SOEs Finances
* Swaziland
* Zambia * Zambia * Zambia
Mining Taxation, SOEs Finances
* Zimbabwe * Zimbabwe * Zimbabwe
Land, SOEs Finances
Update on Selected Bank Policies and Programs
World Bank Group Support for the 2030 Agenda for Sustainable Development
1. A new Operating Model2. Working with Others – partnering on global initiatives3. Helping to deliver integrated development solutions4. Leveraging Concessional and Non-Concessional Finance5. Assist with the Mobilization of Domestic Public Resources6. Assist with the Crowding-in of Private Sector Resources7. Facilitating coordinated action on Regional opportunities and challenges8. Combatting Climate Change9. Catalyzing on Development Data Revolution10.Maximize use of financial resources
NB: The list is not exhaustive
Update on Selected Bank Policies and Programs
GMR 2015/16 – Development Goals in an era of Demographic Change
Despite solid development gains, progress has been uneven and significant work remains.
3 Key Challenges remain:1. Depth of remaining level of poverty2. Unevenness in shared prosperity3. Persistent disparities in non-income dimensions of development
Profound changes in global demography have the potential to alter trajectory of global development over SDG period
Demographic change will require sound policies informed by a long-run perspective and tailored to a nation’sdemographic context
Policy opportunities also exist to arbitrage demographic diversity across countries
To speed up progress, countries need to step up efforts:a) To sustain broad-based growth, b) Invest in people, and c) insure the poor and vulnerable against sudden and emerging risks.
Visit the Rest of the Countries Organize a Joint Technical Lending Conference Organize African Heritage Days for EACH Country
Seek Budgetary Support for Countries suffering from Low Commodity Prices Ensure that a Pandemic Emergency Facility (PEF) turns into a reality Ensure that WBG has a new Engagement Model with New Instruments Encourage IFC and MIGA to invest more in our private sector Solve the Clearance Arrears & Debts of remaining Countries with Special Needs (e.g. Eritrea, Sudan and Somalia) Request more Financial Resources for our Constituency Apply pressure on WBG to come up with a Strategy for MICs and SIDs Campaign for more a STRONG IDA 18 Replenishment Monthly Review of EACH Country’s Loan Portfolio Encourage great Diversity in WBG Senior Management Positions
for the Constituency
Visited 15 of the 22 Countries in ourConstituency
Nov 1st 2014 – Sep 30th 2015
Expect to visit the remaining 7 Countries in our
ConstituencyOct 15th 2015 – Jan 31st 2016
Visited 3 of the 22 Countries in ourConstituency
with a Group of Executive Directors from World Bank Group – Feb 2015
The Institution is still undergoing changes to find the best organization structure to fit itsdevelopment strategy.Significant adjustments are being made to allow IFC and MIGA to operate under oneUmbrella – One World Bank GroupSimilarly, the re-organization implicate Staff moving from HQ to the field. Some of theexisting staffs are been given the option to retire, while new employees are recruited.
On the operational front, WBG is replacing the Country Partnership Strategy with Country Systematic Country
Diagnostic and Country Partnership Framework. Some of the Units are being consolidated to generate US$400 MCost Savings Over 3 Years.
Acknowledgments
To
The Team
Mr. Andrew Bvumbe – Alternate Executive Director
Senior AdvisorsMr. Anthony BarclayMr. Felleke MammoMr. Sheku BanguraMr. Chris HovekaMr. Wilson BandaMs. Solome Lumala
AdvisorsMr. Chola MilamboMr. Antonio FernandoMr. Edouard NgirenteMr. Dismas BaransakaMr. Allan Ncube
Mrs. Wubalech Mekonnen – Senior Executive AssistantMr. Mohammed Ahmed - Program AssistantMs. Lozi Sapele - Program Assistant
Botswana Burundi Eritrea Ethiopia Gambia, The Kenya
Lesotho Liberia Malawi Mozambique Namibia Rwanda
Seychelles Sierra Leone Somalia South Sudan Sudan Swaziland
Tanzania Uganda Zambia Zimbabwe
Original Quote by: Louis, Rene, Peter LAROSELima, Peru, October 8th, 2015.
THANK YOU, MERCI, A SANTE SANA, OBRIGADO, ً شكرا