Interview - AfDB Increases Support to Fragile States - Lead Economist, James Wahome
Mr. James Wahome, Lead Economist in the Fragile States Unit of the African Development Bank (AfDB) Group, has highlighted the institution's increasing support to fragile states since the unit was created.
“The 209 Annual Report is clear in suggesting that addressing the difficult and diverse development challenges in fragile states has increasingly become a core business mandate of the Bank since 2008, when Board approved the establishment of the Fragile States Unit and the Fragile States Facility,” Mr Wahome said in an interview in Tunis.
He further underscored the Bank’s vision of scaling up development assistance to fragile states, with the objective of addressing the debilitating poverty situation in these countries, improving governance, stabilizing the macroeconomic framework, principally through the budget support instrument, arrears clearance and debt relief, and ultimately improve development outcomes and achieve progress towards the MDGs.
The 2009 Annual Report presented to the Board of Governors Meetings in Abidjan revealed that the Fragile States Unit and the Fragile States Facility (FSF) continued to perform well in implementing the Bank’s strategic framework for country-tailored assistance that responds to the diversity of needs and opportunities in the fragile states.
Mr. Wahome confirmed that the Bank Group approved a total of US$ 547 million (UA 365 million) from the FSF to support operations in 2009 in many areas such as macroeconomic stabilization, governance reforms, arrears clearance, infrastructure rehabilitation, and institutional capacity development.
The Annual Report also emphasized the difficult development challenges in fragile states. Despite the support provided by the Bank and other partners to these countries in 2009, overall economic performance was somewhat unfavourable in almost all fragile regional member states, due to a combination of factors, including the impact and adverse effects of the food, fuel and ultimately, the global financial crisis.
The effects of these crises resulted in the decline of export earnings, reduced remittance flows and tourism earnings, as well as declining capital inflows which caused serious balance of payments difficulties in these fragile and vulnerable countries. The Report further noted that the accompanying exchange rate volatilities coupled with job losses resulted in per capita income declines of more than 50 percent in some of the countries, thus undermining gains from economic reforms and advances the countries had made in the fight against poverty. The Report revealed that it was in response to the phenomenon that the Bank responded with substantial approvals to finance 12 operations in Guinea-Bissau, Togo, Côte d’Ivoire, Liberia, Sierra Leone, Comoros and Central African Republic.
In this regard, Mr. Wahome underscored the Bank’s vision of scaling up development assistance to fragile states, with the objective of addressing the debilitating poverty situation in these countries, improving governance, stabilizing the macroeconomic framework, principally through the budget support instrument, arrears clearance and debt relief, that will ultimately improve development outcomes and the attainment of the MDGs. He emphasized the Bank’s efforts to ensure additional resource mobilization through strong partnerships with the Bretton Woods Institutions, United Nations agencies, and other organizations aimed particularly at supporting governance reforms while providing technical assistance as well as capacity-building services in the fragile states.
The Annual Report had noted that apart from the advantages of being a member of the Organization for Economic Cooperation and Development-Development Assistance Committee (OECD-DAC) International Network of Conflict and Fragility and the Multilateral Development Banks’ Working Group on Fragility and Conflict-countries, the Bank had also benefitted from its intensified collaboration with the African Union Commission and UN agencies, especially the UN Economic Commission for Africa (ECA), in undertaking Economic and Sector Works on peace and state-building in Africa.
Resources from the FSF, provided on a case-by-case basis to post-crisis and post-conflict transitional countries assist in filling critical financing gaps that are directly linked to the recovery programmes of the beneficiaries. The Fragile States Unit of the Bank is on track in implementing the FSF's vital development objectives in the beneficiary countries, Mr. Wahome said.