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Our goal is to help turn around fragile states – WB’s Diagana

Interviews

Our goal is to help turn around fragile states – WB’s Diagana

Ousmane Diagana is the Vice-President of the World Bank for West and Central Africa. He oversees these two very different sub-regions each with its own sets of challenges and needs. Eleven of the 22 countries in West and Central Africa are classified as ‘fragile state’. His operational portfolio is around $50bn to help turn these countries around. What are his plans? Interview by Hichem Ben Yaïche and Nicolas Bouchet.

As the VP of the World Bank for West and Central Africa, what are your key objectives for the region?

The World Bank has a very long-standing presence in West and Central Africa through financial assistance to these countries. We support development projects and we provide technical assistance and advice.

Our new strategy is centered on ‘maximum impact’ – which means understanding the state of play and defining a proper diagnostic tailored to each country’s needs.

The pandemic, among other issues, has had an adverse economic impact on the countries in the region. You have a war chest of $38b How do you intend to spend it?

Before the Covid-19 global crisis, we had programmes and projects to the tune of $38bn across the 22 countries in the region. In response to the pandemic and all its adverse effects, we have allocated an additional $11bn. These special resources have been mobilised to minimise the impact of Covid.

We are helping countries to gain access to vaccines including providing them with budgetary support to purchase vaccines. We have been part of the process whereby the G7 countries have suspended debt service payments and we have focused our efforts on supporting jobs, education, agricultural production and tackling food insecurity. And, of course we continue to provide technical advice and support.

We have seen large increases in government spending and a spike in government debt. Some countries are calling for a reduction or cancelation of their debts. What is your view?

Debt is necessary to finance development and sometimes very high investments. It should be transparent. The traceability of resources should be guaranteed and reporting done in a secure manner. These are the conditions for obtaining the expected benefits of debt.

We have seen over the past decade that the volume of debt has tripled on average in West Africa. This is not sustainable over time and we are working with African countries on a debt strategy that is much more development-oriented.

Debt should be used to finance sustainable investments and structured so that the repayment of the debt is financed by gains generated from these investments.

You oversee two regions, West and Central Africa each very different from the other. How do you align strategies and objectives when the regions have such different outlooks and challenges?

Let me start by saying that we work on a country by country basis. But at the same time, we also do have regional programmes.

As a matter of fact, countries can benefit from the experience of others, and adjust development policies and priorities accordingly. Countries do not, and should not, operate in isolation.

I should add that countries in the region have many challenges that are common to one another. For example, the issue of governance and strengths of institutions is a common trait. Another one is the strong dependence on commodities. A third challenge is a growing young population, and an infrastructure and support system that is not adequately adapted to their needs. The fourth is climate change, an issue that affects each of these countries.

Our remit is to work alongside these countries to help them progress and help them address some of these issues by providing both the financial support and also the technical assistance to do so.

The reality is that you are in charge of a region that is in crisis, especially when you look at what is happening in the Sahel. How do you go about prioritising issues to end this vicious cycle of poverty, jihadism, insecurity?

You are right – 11 of the 22 countries face conflict and institutional instability. Access to services is relatively low and poverty is high. We estimate that a quarter of the world’s population living in extreme poverty are from the region.

But it’s important to note that the World Bank and other partners cannot do this alone. To stop this cycle that you have mentioned, requires first and foremost a commitment from the countries themselves to change.

I see things from a different lens. Their situation is not inevitable. These countries have not always been fragile and each has very significant potential.

We see our role as an institution to help turn this potential into real opportunities, and ensure these assets are productive. What does this mean in real terms? It means supporting them in strengthening human capital, transforming agriculture, financing infrastructure, increasing access to energy, helping young people fulfil their potential – and that means providing access to quality education and to health services.

And this reflects our funding priorities – you will see that the bulk of the projects we fund revolve around these areas.

Over the next two years 2021-2023, we will be investing an additional $8.5bn in the countries of the Sahel specifically. Most of the funding will go into projects that will have a significant impact and contribute to breaking the cycle of violence and poverty. They will create jobs, provide people with access to basic services, and strengthen the local infrastructure and institutions.

While there are many immediate emergencies, building a country requires a number of actions that are taken over time. So how do you prioritise your interventions?

Development is a long-term agenda and we know it is not linear – we work in a constantly evolving environment. This is why our presence in these countries, our engagement and partnership with stakeholders are framed for the long run.

We have offices and teams in the different countries made of passionate experts who work in close collaboration with the authorities and civil society at large. Together we analyse and constantly evaluate our interventions to learn from our actions, scale up what has worked, and correct what has not.

We have the benefit of being an international institution, and we share best practice from around the world to see what can be replicated in Africa. You are right that it takes consistency and it is the work of many years.

We must avoid being fatalistic. There are countless examples of countries that were poor, that were considered hopeless by many experts and commentators and yet managed to build back from the brink and have made significant progress through sustained reform and with support from partners. This is why we must remain constant with these countries.

Without wanting to sound fatalistic, the development indicators in the Sahel are alarming. How can you send a signal of hope to young people when the entire area is in crisis?

You are right. For example, the rate of access to electricity is around 30% in the Sahel countries. We have made a commitment that in five years, the rate of access to electricity will double. Other reforms must be seen through and encouraged to give young people hope and to create the conditions for development.

We know that if the issues of governance and the stability of institutions are not assured, investments cannot develop and the private sector cannot play its role alongside the state and invest in priority sectors. Even the development gains achieved could be compromised.

How closely do you work with the different countries?

We have local offices in each country made up of local and international experts. These people know the countries and have a proven track record.

There is continuous dialogue between the national authorities and our staff. We ensure that there is complementarity between what we propose and what they propose, and we ensure that our interventions are anchored around national priorities of development.

Does the Doing Business Index have a role to play in fragile states wrestling with more immediate challenges?

The financing needs of countries are numerous, and it is not up to the state to do everything. Financial partners like the World Bank cannot afford to do everything either.

The Doing Business Index allows for countries to work on improving the conditions in which the private sector can operate, so that they can also play an active role and complement the work of the state and other partners.

We support countries through specific programs to implement reforms that improve the investment climate. This is essential to broaden the scope of partners who can come and invest in a given country, including in fragile states.

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