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Note: This document is from the archive of the Africa Policy E-Journal, published
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Africa: The World Bank and African NGOs
Any links to other sites in this file from 1995 are not clickable,
given the difficulty in maintaining up-to-date links in old files.
However, we hope they may still provide leads for your research.
Africa: The World Bank and African NGOs
Date Distributed (ymd): 950221
Policy Dialogue on IDA 11
From: InterAfrica Group NGO NETWORKING SERVICE
Contact: Vanessa Sayers, NNS Co-ordinator
Feb. 12, 1995
What is IDA?
The International Development Association (IDA) is a branch of
the International Bank for Reconstruction and Development
(IBRD), better known as the World Bank. IDA was established
in 1960 to lend funds to developing countries which cannot
afford IBRD lending terms. While IBRD "loans" must be repaid
with interest at market rates over 15 to 20 years, IDA
"credits" (extended to governments only) have a 10 year grace
period, and are for repayment over 35-40 years at virtually 0%
interest. All of the countries of the Horn of Africa -
Djibouti, Eritrea, Ethiopia, Somalia and Sudan are eligible to
receive only IDA funds, because of their low GNP (although
only Ethiopia borrowed funds in 1994).
Why is it being discussed now?
IDA funds are raised from 35 donor governments, of which the
United States, closely followed by Japan, is the largest
contributor. IDA is replenished every three to four years and
has been replenished ten times to date. There is currently
much discussion around IDA in donor countries, among NGOs and
developing country governments. This is because the decision
making for the 11th replenishment of IDA which will run from
mid 1996 to the 1999, takes place from January to September
this year and was preceded by the 50th anniversary of the
World Bank and International Monetary Fund (IMF). NGOs used
this anniversary as an opportunity to discuss and lobby for
reform of these institutions - including reforming IDA.
What does it have to do with NGO's work?
According to literature produced by the World Bank, poverty
reduction has been IDA's "raison d'etre", particularly since
the 1970's. However, the same literature states that only a
maximum of 40% of IDA lending fulfils IDA's own criteria for
having the potential to reduce poverty as set out under
the'Programme of Targetted Interventions'. While there has
been a shift towards investment in rural and human resource
development since the early years when all investment focused
on infrastructure, there is still concern about the level to
which funds are positively (or otherwise) affecting the
poorest sectors of society. Around one quarter of total IDA
lending (48% in Sub-Saharan Africa) is presently given to
national macro-economic reform programmes - often called
'structural adjustment'- in the form of balance of payments
support and in some cases to help pay off old debts.
What are NGOs saying about IDA?
There is concern among NGOs and others that the effects of
'adjustment' on the poor have been harsh and given IDA's
mandate of poverty reduction that there is a contradiction
between funding adjustment programmes and reducing poverty.
Some have gone as far as to argue that IDA and its lending
should be entirely separate from the IBRD and its policies.
The African NGO position attached deals with the likely
reality that adjustment lending will continue and that, given
this, there should be a decrease in the proportion of lending
for adjustment and an expansion of human development lending,
while the benefits from all lending - including adjustment -
should flow "disproportionately to the poor and disadvantaged
sectors of society".
At present the economic and political climate in the developed
countries, particularly the United States, is raising concerns
that budget cuts will lead to a substantial drop in
contributions to IDA 11 this year. As IDA is the only source
of large-scale development finance for nations which are not
considered 'creditworthy' by the international markets,
African NGOs want it to be retained at its present level, but
to fulfil its mandate more effectively.
The African NGO consultation on IDA 11 took place in Addis
Ababa on January 9-13, 1995. It is one of three consultations
set up by the NGO Working Group on the World Bank. The others
will be in Asia on March 20-24 and in Latin America on April
23 -27.
For other resources on IDA and NGO papers and reports on the
World Bank and IDA, contact the NNS office at the email
address above.
-------------------------------------------------------------
RECOMMENDATIONS OF THE AFRICAN NGO CONSULTATION ON IDA11
RECOMMENDATIONS:
Having considered the performance of IDA and the conditions in
African countries where IDA programmes operate, we, African
NGO's have concluded that it is essential for the IDA
programme to continue.
1.We view the potential of future country programmes and their
chances of success positively, given the right criteria and
correct implementation. We draw important lessons from the
past which informs the critique contained in this memorandum.
2.As regards IDA11, African NGO's believe that real funding
levels should, as a minimum, be maintained at present levels
and preferably be increased.
3.We express concern that the poorest were not deriving
recognisable or adequate benefit from different country
programmes which causes NGO's to argue that the focus of
benefit to the poorest should be sharpened in regard to IDA11.
IDA should therefore focus on redressing inequities created by
the market. The benefits should flow disproportionately to
the poor and disadvantaged sectors of society in all forms of
IDA lending, including adjustment.
4.Poverty reduction depends on providing poor people with
access to resources to do things for themselves. IDA needs to
tackle the reasons that make poor people poor.
Given the multicausal origins of poverty and its many
manifestations in rural and urban areas, as well as across
countries, poverty reduction will not be achieved through
unitary economic strategies nor imposed models of human
development. Targetted poverty reduction interventions mean
not only effective ways of delivering resources to those most
in need but a more precise understanding of the economic,
social and political dynamics at work in impoverishing
specific communities. Therefore, poverty reduction programes
should emphasize the local understanding of the nature of
poverty, enable locally-based initiatives to address this and
expand opportunities for the poor to foster new mechanisms of
social integration and support.
5. We are concerned at the number of IDA-eligible countries
that in practice are not receiving IDA lending. About 40% of
the population of IDA eligible countries lived in countries
excluded from funding in 1994. Ways should be found in IDA11
to include poverty-focussed programmes in such countries.
6. The World Bank has made some progress as regards the
importance of participation in its programmes. For IDA11 the
principle and practice of participation needs to be deepened.
This will provide the basic building blocks for effective
targeting of IDA lending towards poverty alleviation. There
should be full participation by governments, relevant civil
society organisations (social proximity), including the
beneficaries in sectoral fora to provide a relevant
institutional framework. This participation refers to all the
processes such as poverty assessment, public expenditure
review, policy framework paper negotiations, country
assistance strategy, project design, implementation and
monitoring.
In seeking solutions it is critical to start with the
solutions that the poor themselves offer.
We are concerned about the Head-quarter-centered, Washington
consultant-centered and often government-centered decision
making processes that currently inform IDA. Under IDA11 there
is need to use local experience knowledge and experts.
7. The overhang of "debt" and the increasing levels of
multilateral debt, particularly through the accumulation of
arrears, is now pre-empting a large part of the available
resources. Countries attempting to keep up with their debt
service are seriously constraining their opportunities for
growth. Countries not doing so accumulate further arrears and
risk default.
The use of IDA funds (particularly the "fifth dimension"
funds) for debt management and debt reduction strategies of
specific countries may be understandable but this should not
be interpreted as providing a long-term and comprehensive
solution to the problem of multilateral debt. A strategy,
separate from IDA, but involving the World Bank, needs to be
evolved to address this problem. In summary, there should be
no recourse to IDA funds as a soft option to address the
problem of the growing overhang of multilateral debt.
8. IDA lending should be skewed in favour of creating the
essential components of an enabling and accountable state. The
capacity of the state to implement effective poverty reduction
strategies/programmes can only be enhanced, in this way.
In advocating for unqualified liberaisation of markets, the
Bank has not given due recognition to the positive role the
state can play in African conditions in view of the fragile
nature of the private sector. In particular the implementation
of IMF stabilisation and World Bank adjustment programme risks
curtailing the role and capacity of the state. Much needs to
be done to strengthen the positive aspects of the state.
9. The present approach of relying on a modified version of
"trickle down" and addressing the persistence of poverty as a
short-term phenomenon corrected by instituting "safety nets"
is very short-sighted and unsustainable.
Poverty should form the focus of project/programme design and
should be specifically targeted rather than as a short-term
corrective necessity until "trickle down" growth filters
through. Only in this way can a sustainable reduction in
poverty be achieved.
10. World Bank figures* show that 48% of IDA lending in
sub-saharan Africa is classed as "adjustment lending". As
NGO's we express grave doubts about SAP and how it affects the
situation of the poor.
In IDA11 there should be a reduction of adjustment lending
because of the negative consequences experienced currently in
some cases. Therefore the uses or allocations of IDA11 should
be restructured. Infra-structure and adjustment lending should
not be more than 40%. Human development lending should
constitute at least 60%. The latter includes: education,
health, water and sanitation, agricultural research, extension
services, nutrition as well as credits to make poor people
agents of economic change and tackling what makes people poor,
such as land reform, law reform etc.
11. In view of the aforegoing considerations, we call upon all
African NGO's, voluntary development organisations and
community-based organisations:
* to substantially undertake the task of monitoring the impact
of IDA on the poor;
* to participate actively in the collecting of data bases that
make such monitoring possible;
* to conduct, to whatever extent possible, detailed
micro-level studies on the impact IDA is having; and
* to publicise and to specifically inform the World Bank,
Governments and donors of the impact of IDA as perceived
through the NGO experience.
Addis Ababa
11 January 1995,
* Oct.1994 Review of FY94 IDA Programme.
Note added by Africa Policy Information Center: Participants
at the meeting, in addition to representatives from the World
Bank, included representatives from CEVO, IAG, IARA, OXFAM USA
and RADEV (all based in Ethiopia), FAVDO (Senegal & U.S.A.),
Kagiso Trust and Foundation for Contemporary Research (South
Africa), Swiss Coalition for Development, DENIVA (Uganda),
Christian AID and TWN (UK), NGO Coordinating Committee
(Zambia), and MWENGO (Zimbabwe).
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This material is being reposted for wider distribution by
the Africa Policy Information Center (APIC). APIC's primary
objective is to widen the policy debate in the United States
around African issues and the U.S. role in Africa, by
concentrating on providing accessible policy-relevant
information and analysis usable by a wide range of groups
and individuals. APIC is affiliated with the Washington
Office on Africa (WOA), a not-for-profit church, trade union
and civil rights group supported organization that works
with Congress on Africa-related legislation.
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