My interview with Mr. Montador, published in The Rising Africa magazine, 2012
For
a while Bruce Montador was our man in Tunis: from 2007 to 2011, he represented
Canada at the African Development Bank as an Executive Director. Having
travelled to 28 countries in Africa either for work or fun, he shared his
thorough Africa-insights with The Rising Africa.
First
of all, how does the development work of AfDB differ from the one of World Bank
(and the planned development bank by the BRICs)?
The AfDB has fewer resources than the World
Bank has for the African region, so it needs to focus. It tries to limit its
programming to a relatively few areas – infrastructure, private sector,
governance and higher education. Infrastructure is critical, particularly for
things like electricity, regional integration and water. The private sector is
taking off – there are ever more references to Africa in the mainstream
business press, but there are still many challenges facing both African and
foreign entrepreneurs.
It is hard to comment on the proposed BRICs
development bank, since as far as I know it is not yet operational. There is a
tendency to announce projects like that without them ever doing very much for a
range of practical reasons.
How
does Canada participate and finance the bank? Is the contribution from Canada
growing or the opposite?
Canada supports the Bank in two ways. As a
shareholder, Canada’s capital pledges allow the Bank to borrow at good rates on
the market, to on-lend to middle income countries and the private sector. As
one of the few remaining AAA credits, Canada’s pledge is important to the Bank,
particularly since Canada is already a big shareholder for our size (about 10
percent of the non-regional share).
Moreover, during the financial crisis, there
was a need to increase the Bank's capital, and the temporary pledge of capital
Canada made at the Pittsburgh G-20 meeting in 2009 allowed the Bank to continue
to serve its members.
The other way we, Canadians support the
Bank is through the budgetary grants to the African Development Fund to allow for loans and grants to
low-income countries and for regional public goods. We currently give 108.5 million dollars a year – it will
be up for renegotiation next year for the cycle starting in 2014. We are the 6th
largest donor, and our contribution has grown with each replenishment.
Canada is seen as an important partner – though
for African Development Fund, the big players are really the Europeans – the
UK, Germany and France. Canada also supports some multi-donor trust funds that
do additional work – in areas like preparatory work for regional infrastructure
projects and water, and for Aid for Trade.
What
can Canadian companies and NGOs do to benefit from the AfBD? Please share
recommendations...
Canadian consulting companies do quite well
from AfDB contracts. Firms that are interested should be in touch with the
Embassy in Tunis, which can help keep them informed of opportunities. Companies
with bigger investment interests should check with the Bank's private sector
department to see if there are possible synergies. Some NGOs may find consulting
opportunities, and some of the thematic trust funds, like the Congo Basin
Forest Fund, have approved projects from Canadian NGOs. AfDB does not do as
much outreach to NGOs as at the World Bank, in part because NGOs have not
typically paid a lot of attention to the AfDB.
What
are the trends affecting the AfBD and how does it affect Canadian companies and
NGOs?
The AfDB is bolstered by the growing
Afro-optimism, and companies and NGOs will see growing opportunities. However,
the tight fiscal environment in donor countries will probably limit growth of
the concessional window, the AfDF, and thus limit growth in the Bank Group's
operations in least developed countries. There may be fewer Bank contracts
available in traditional areas of health and basic education. Finally, there
will probably be more competition from African firms in the markets for Bank
procurement.
Can
you share your personal opinion on Africa’s development; say from 2007 to 2011,
on the example of one or two countries of your choice?
Since my work in AfDB largely coincided
with the financial crisis – I can say that Africa was doing quite well before
the crisis, and was not directly touched by the financial crisis. The only
country that was really integrated into the international financial system,
South Africa, has a sound banking system. However, like Canada, the continent
was adversely affected by the economic downturn created by the financial crisis
in the US and Europe.
In addition, the nervousness of international lenders led them to pull
back from marginal markets with which they were less familiar, a description
which basically fit the whole of Africa.
Fortunately, the relatively rapid recovery
in Asia, and in commodity prices, as well as a return of Asian investors
looking to secure supplies of commodities, helped Africa to get back on to a
solid growth path relatively quickly.
That is an overview, obviously situations
vary. A country like Ghana, where governance and economic reforms were well
underway, and where new oil production is adding to growth, is a very positive
story. Tunisia, where political uncertainty has devastated the tourist sector,
has actually not done badly in terms of sustaining exports despite the weakness
in the euro-zone, its main market. The East African Community has been showing
fairly solid growth, based on resources but also the gains from growing
integration.
Professor
of economics at the London School of Economics and Political Science Alwyn
Young has claimed in his research paper ‘The African growth miracle’ that Sub-Saharan
living standards (as measured in ownership of durable goods, the quality of housing, the
health and mortality of children, the education of youth and the allocation of
female time in the household) have been growing three and a half to four times
the rate indicated in international data sets.
It is an interesting analysis, and not
inconsistent with the AfDB's estimates of a larger African middle class than
might be expected. However, it is still
important to recognize that many of those people emerging from poverty are
still relatively vulnerable; the trend is positive, but there is a long way to
go. This of course also means that there is lots of scope for further strong
growth.
In
your view, is it justified to compare North African countries with Sub-Saharan
countries – or should the stats and analysis be always separated, as two very
different entities?
From the political perspective of African
countries and the African Union, it is all of Africa that is the frame of
reference. Obviously there are cultural and economic differences between North Africa
and Sub-Saharan Africa but I don’t know if looking at the Middle East and North
Africa together is a better framework. There are lots of differences between
the Maghreb and the Mashreq.
We
in CCAfrica often make country-based overviews of development (so called
Monthly African Indicators), but perhaps there are other units (cities,
nationality, culture etc) which would tell a better story?
With 54 countries the indicators become a
sea of data, but the cities, cultures etc are open to interpretation. I would
suggest looking at the five broad regions – North Africa, East Africa, Southern
Africa, Central Africa and West Africa. There are one or two countries whose
allocation is controversial or in flux, but broadly this approach produces
relatively homogeneous (or less heterogeneous!) subsets. One story to tell in
this context would be the relative success of regional integration in the
different areas – best in East Africa and weakest, so far, in North Africa.
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