Life begins at 80! The World Bank with a new Spring in its step

by Lionesses of Africa Operations Department

As American Presidential hopefuls will tell you, life begins at 80 and so given the World Bank turned 80 this year, would there be a new lease of life, a new energy to tackle the world’s greatest problems?

What would we learn from their Spring meetings that were held this month? Could it be a game-changer? Could there be a realisation that to assist Africa, to properly assist Africa, this has to come from the bottom up, to build SME businesses, to build employment, to build communities, to ensure a future at home, all of which we have been pushing and saying since the day Melanie founded the Lionesses of Africa ten years ago.

The World Bank Group is amongst other things a huge investor and lender into the world’s development drive and so what they say, what rules they put in place, what suggestions they make, and how they lead by example makes a huge difference. It all filters down through the various stages of the waterfall until at long last meets our membership on the ground. That is why what The World Bank does and says is so important for us.

Our excitement has been building ever since the World Bank published its ‘Women, Business and the Law, 2024’ report, which had shaken things up by investigating just how the improvements in Law across Africa had actually and in reality impacted women on the ground, “to measure the implementation gap between laws— de jure—and how they function in practice—de facto.”

In spite of the move in the right direction at the ‘Input’ stage (changing the law), on the street (the ‘Outcome’ stage) the results were shocking - there was not one single country that had 100% equality for women in law. For Entrepreneurship “…only 44 percent of the legal provisions that support the entrepreneurship of women are in place.” The good thing though, is we are now seeing data, which (as data tends to do) will shine a light on the issue and ensure blockages or failures cannot be ignored. At the very least it stops us from assuming we are moving in the right direction just because the ‘Inputs’ look good and (in this case) iniquitous laws have been changed.  As we all know, changing the law is one thing, but if it is not enforced or enacted - what’s the point?!

Data was certainly at the forefront of the President of the World Bank Group, Ajay Banga’s thoughts as he announced an opening of the World Bank’s data library to the world as a public good. That includes “…private sector recovery data by country income…private sector default data broken down by credit rating [and]…sovereign default and recovery rate statistics, dating all the way back to 1985,” which for anyone working on the credit ratings of deals across Africa is a dream come true. As he said these moves were there “to drive impact and to create jobs”. All too often we see a lack of efficient pricing of loans and investment due to there being so few options available (just think of the iniquitous average of 211% collateral for loans across Africa as per WB data).

Too many banks mis-price too high the risk of lending into the countries of Africa, whether due to lack of knowledge, lack of credit history or lack of support from the regulatory bodies. The end result is the same, a lack of finance, a lack of competition and a lack of choice, and as we all know, women are the last in the queue for that finite product, so the knock-on is magnified.

There was however a shudder that passed through our body when he announced a pledge (here) to connect 250 million people to electricity (and the AfBD added another 50 million), which on one side is absolutely fabulous and to be wholeheartedly encouraged. But we could not fail to remember our time spent trying to encourage a German guru in medium sized (circa 1MW) Solar plant building to give Africa a chance, only for him to take one look at the World Bank’s well-publicised 5 US cents per kWh deal (“with no subsidies”) from its ‘Scaling Solar’ drive in Zambia, and turn tail and head back to Germany, saying it was not possible to compete with that. He was right of course, the subsidies had been well hidden (here), the market knew it and walked away, and the results speak for themselves: “Though home to 60% of the world’s best solar resources, Africa today represents just 1% of installed solar photovoltaic capacity.”

So let’s see what devil there is in the detail, but lessons we hope have been learned.

What was great was that Banga was very strong on his own organisation, hitting hard from the beginning: “…an evolution and reform agenda…World Bank Group to be more ambitious and deliver more than ever…building a faster, quicker bank.” 

Our title photo from his video says it all. 19 months for project approval? How is that even possible? But sadly as we have found out to our cost too often, the time it takes dealing with so many in the development world is just incredible. It is no wonder for many deals the private sector just gives up. Banga has promised to cut that down to a third of the time - certainly a start. People just do not appreciate how many deals get killed by a dying of momentum. “Time kills all deals” - Stephen A. Schwarzman, and he should know given he runs Blackstone (AUM a cool $1 trillion). These are people’s lives, livelihoods and futures we are dealing with.

There were many other areas discussed during this week, projects announced and promises made, many that got a cheer from our office, but the main one for us was still to come and related to results - Inputs vs Outcomes.

Margaret Kuhlow of the US Dept of Treasury said it best (here 1:30:05): “We’ve been pleased to see at the World Bank in particular and we've seen it spread to the regional development Banks as well is this move to start to measure and incentivize outcomes rather than inputs. Dollars are an input not an outcome or an impact and you don't want the institutions incentivized to go big and expensive when you could maybe have more impact, smaller and less expensive.”

As Anna Bjerde, the World Bank Managing Director of Operations wrote (here): “A key component of this work is measuring outcomes rather than inputs and focusing on results that further our aim to improve people's lives and livelihoods. For example, rather than counting how many of our projects have a gender component, we will report on how much they advance gender equality and economic opportunities.” We are always ever hopeful that more weight in business support will be given to women’s ownership rather than (say) producing products that may or may not be used by women…perhaps this will be the catalyst for that change.

Many roll their eyes when the older generation tell us what to do as we are so impatient for action, but sometimes, just sometimes as Ronald Reagan said in the debate with Walter Mondale (here) when concern was raised about his potential energy to tackle the world’s greatest problems, he brushed it aside, instead refusing to “…exploit for political reasons his opponent’s youth and inexperience”.

There is a lot to be said for experience, for having learned the lessons of past failures. As with Reagan, so too the World Bank, the proof will be in the pudding, so we shall wait to see how these announcements will water down to the ground level. However, the signs are that under the clear leadership of Mr Banga things will start to move, and move faster, and in addition, there will be a new appreciation through data and measurement of what our incredible and inspirational membership of over 1.8 million African Female Entrepreneurs can deliver, with the right help.

Stay safe.