Statement by H.E. Zainab Shamsuna Ahmed, Minister of Finance, Budget And National Planning On behalf of the Constituency of Angola, Nigeria and South Africa
We are concerned that global growth remains subdued as trade tensions are affecting international trade and investment. We note the IMF World Economic Outlook (WEO) forecast for global growth of 3% in 2019 and a projection of 3.4% in 2020. We are concerned with the down side risks from further trade tensions, policy uncertainty from a no-deal Brexit and an increase in financial vulnerabilities in emerging markets and developing countries. To help reduce policy uncertainty, we call on the World Bank and IMF member countries to take necessary actions to foster a modern, rules-based and fair-trading system, with the World Trade Organization at its center.
2. We note the IMF growth forecast for Sub-Saharan Africa (SSA) of 3.2% in 2019 which we do not view as adequate to help the region achieve the targets of the Sustainable Development Goals (SDGs). Despite the low economic performance of the three largest economies in the region, we are encouraged that approximately 20 economies in the SSA are expected to record growth that exceeds 5 percent in 2019. We call on the International Monetary Fund (IMF) and the World Bank Group (WBG) to help African countries with policy support to ensure that growth is high enough, inclusive, job creating and associated with economic transformation. We call on African countries to address debt vulnerabilities and aim to achieve the right balance between debt and growth objectives.
The World Development Report 2020 (WDR20)
3. We welcome the World Development Report 2020 on global value chains (GVCs). We are encouraged by the findings of the Report that the development of GVCs has led to economic growth, poverty reduction and net increase in jobs in regions that have strong GVC participation. However, we note the findings of the Report that the development of GVCs has been concentrated in few regions such as North America, Western Europe and East Asia, with Sub-Saharan Africa (SSA) only connected to the chains through exports of raw material and minerals.
4. We view infrastructure deficit as one of the main factors behind the high trade cost in SSA which partly harm the competitiveness of industries in the region and limit integration into GVCs. We urge the World Bank Group to partner with African countries to scale up public and private investments in logistics infrastructure and energy. We call for prioritization of regional integration in the financing and policy offering of the WBG and the IMF to leverage from regional solutions such as the recently ratified African Continental Free Trade Area Agreement.
5. To complement infrastructure investment, we call on the WBG to work with SSA countries to enhance domestic policies that are critical for industry competitiveness, such as elimination of red tape for business, efficient operation of industrial parks, export promotion and facilitation of trade finance. In addition, we call on the World Bank and the IMF to assist with policies to address challenges from trade (e.g. job losses from capital intensive trade production, tax policies to attract GVCs without undermining revenues and measures to deal with IFFs).
Jobs & Economic Transformation (JET) – Drivers & Policy Implications
6. We welcome the Paper on Jobs and Economic Transformation (JET) and support its call for the WBG to help countries pursue economic transformation and private sector development as the pathway to more and better jobs in the formal and informal sectors. We underscore the realization that the JET objectives described in the Paper requires a strengthened World Bank Group approach. Thus, the WBG needs to increasingly focus on coordinated approaches, including through integrated operations that address both demand and supply-side constraints, as well as more broadly on coordinated interventions at the sectoral, portfolio, and national/regional levels.
7. We view the role of the International Development Association (IDA) in helping SSA countries achieve JET as very important. The 18th replenishment of IDA (i.e. IDA18) focused on developing knowledge and diagnostics tools to support the JET agenda. We therefore, call for a pivot towards operational impact, including through a more deliberate focus of JET in country programs in IDA19. This will require changing the way the WBG approaches JET, including the provision of incentives for focusing on more transformational, job-creating interventions led by the private sector.
8. The proposed operational and policy recommendations in the paper will require a JET implementation strategy for the WBG. A WBG JET strategy is critical for strengthened coordination with development partners from the public and private sectors and for closer collaboration with development partners, both through global and regional strategic initiatives and country platforms. We call on Management to report back to Governors on progress at the 2020 Spring Meetings.
The Human Capital Project
9. We welcome the progress made on the Human Capital Project since the publication of the Human Capital Index (HCI) in October 2018. This Update reiterates the WBG strong commitment to the Twin Goals and takes a long-term approach to the development of human capital and its implications in achieving the SDGs. We support the new approach to the HCI to explore skills of working population and cultural factors affecting human capital development. We call on the WBG, under the leadership of the IFC and MIGA, to assist the poorest countries and those under debt distress to mobilize investments for human capital development, including from the private sector.
IDA 19 Replenishment & IDA Voting Rights Review
10. We welcome the negotiations for the 19th replenishment of IDA, together with the proposed special themes, cross-cutting issues and dedicated financing windows and facilities. We continue to call for greater ambition among existing and new IDA donors to address the growing needs of the poor and vulnerable. This call is driven by our collective risks of missing the SDGs if concerted efforts are not made to close financing gaps, address new and emerging development challenges, accelerate growth, safeguard achievements and, build resilience.
11. We endorse the proposed review of IDA voting rights. We fully support both the Guiding Principles and Scope of the review. We request the IDA Board of Executive Directors to lead the review, ensure effective consultations in the process, provide regular updates to IDA Deputies and Borrower Representatives and, provide an update by the 2020 Annual Meetings.
12. Climate change has remained one of the critical factors accounting for fragility in some of our countries including those of the Lake Chad and Sahel Region. While we look forward to the WBG’s comprehensive framework on Fragility, Conflict & Violence (FCV), we call on the Bank to remain proactive in addressing the causes and impact of fragility on developing countries.
13. We look forward to the adoption of the IFC capital resolutions by March 18, 2020.
14. We thank Kristalina Georgieva for the strong leadership during her time at WBG. We congratulate her on her election as Managing Director of the IMF and wish her a successful tenure.