TheCable

The African Development Bank (AfDB) has refuted claims that it contributes to the debt problems of countries in Africa.

The bank was reacting to a statement credited to David Malpass, the World Bank president, that mutilateral development banks have the tendency to lend too quickly thus worsening the debt problems of the affected countries.

In a statement signed by Victor Oladokun, its director of communications and external relations development, AfDB said the African countries have bigger debt exposures to the World Bank.

“In several news reports, David Malpass, World Bank president, was recently quoted as saying some multilateral development banks, including the African Development Bank, have a tendency to lend too quickly and in the process, add to the continent’s debt problems,” the statement read.

“This statement is inaccurate and not fact based. It impugns the integrity of the African Development Bank, undermines our governance systems, and incorrectly insinuates that we operate under different standards from the World Bank. The very notion goes against the spirit of multilateralism and our collaborative work.

“The World Bank’s operations approved for Africa in the 2018 fiscal year amounted to $20.2 billion, compared to $10.1 billion by the African Development Bank.

“With regard to Nigeria and South Africa, the World Bank’s outstanding loans for the 2018 fiscal year to both countries stood at $8.3 billion and $2.4 billion, respectively.

“In contrast, the outstanding amounts for the African Development Bank Group to Nigeria and South Africa were $2.1 billion and $2.0 billion, respectively, for the same fiscal year.”

“We are of the view that the World Bank could have explored other available platforms to discuss debt concerns among multilateral development banks,” it said.

“The general statement by the president of the World Bank Group insinuating that the African Development Bank contributes to Africa’s debt problem and that it has lower standards of lending is simply put: misleading and inaccurate.”

The bank said it recognises countries regarded to be heavily indebted and “closely monitors the upward debt trend” adding that there is “no systemic risk of debt distress”.

It also explained that lending activities are co-ordinated with international financial institutions like the International Monetary Fund (IMF) and World Bank to “determine the composition of financial assistance to low-income countries; and joint institutional approaches for addressing debt vulnerabilities” in African countries.