Tag Archives: IMF and World Bank

AMA

Kaberuka, speakers call for a new era of strong African institutions at 9th Babacar Ndiaye Lecture

MaraviPost

London, United Kingdom, 6 November 2025 -/African Media Agency(AMA)/ Former President of the African Development Bank (AfDB), Dr. Donald Kaberuka has called for Africa to strengthen and integrate its financial and governance institutions to safeguard the continent’s future in a rapidly fragmenting global order.

Delivering the 2025 Babacar Ndiaye Lecture on the sidelines of the World Bank Group/IMF Annual Meetings in Washington DC, Kaberuka warned that “the world is not waiting for Africa; therefore, Africa must not wait for the world,” and urged African nations to take ownership of their development agenda through resilient, homegrown institutions.

Reflecting on global power shifts, Kaberuka pointed to the return of mercantilism; rising narrow national interests; the end of the aid era; weakened global institutions; and the erosion of multilateralism as the five trends that are reshaping the global economy. For Africa, that means turning inward, while leading the charge for a renewed global architecture. “We can no longer rely on post-war institutions that were never designed to address Africa’s challenges,” he said. “Strong nations are built on strong, homegrown institutions; not on borrowed ideas or conditional generosity.”

Kaberuka emphasized that Africa’s development requires an ecosystem approach, where institutions across sectors – finance, trade, peace and security, health, and governance – operate in coordinated harmony rather than isolation. “Like an orchestra, African financial institutions on their own will not get to the end point. It has to be part of an ecosystem of African financial institutions and not simply financial institutions. They have to operate together in a symphony,” he urged.

Africa Export-Import Bank (Afreximbank), Kaberuka said, must be commended for exemplifying this model through its support for the African Continental Free Trade Area (AfCFTA), the Africa Centres for Disease Control and Prevention (Africa CDC), the regional economic communities and other initiatives and institutions of the continent. 

Kaberuka, who is also the Chairman and Managing Partner of SouthBridge, a financial advisory and investment firm, further argued that Africa must lead in reshaping global governance to reflect 21st-century realities and replace the post-World War II institutions such as the Bretton Woods system which were primarily designed for the reconstruction of Europe and Japan and not for the needs of emerging African economies. “We can no longer outsource our future to institutions that were never meant to serve us,” he said, calling for the continent to take a more assertive role in creating new multilateral frameworks that champion African priorities.

Kaberuka stressed that as the world moves from globalization to fragmentation, Africa’s ability to define and defend its interests will depend on the strength, coordination, and legitimacy of its own institutions. Pointing to over $1.1 trillion held by African pension and sovereign wealth funds, he called for new models to mobilize and connect this capital with global investment flows. “It is not only about mobilizing African capital,” he said. “It is about defining how that capital is deployed for Africa, by Africa.”

Earlier, in his welcome remarks, Dr George Elombi, Executive Vice President, Corporate Governance and Legal Services and incoming President of Afreximbank called for urgent action to strengthen Africa’s financial sovereignty through the completion of the continent’s financial architecture. Elombi said the time has come to move decisively toward the establishment of the African Monetary Fund and the African Central Bank as “full operational pillars of our sovereignty.”

He outlined some imperatives for African financial institutions going forward. These include mobilising domestic capital by deepening investment in African assets, ensuring regulatory clarity to uphold investor confidence and fully operationising the AfCFTA. He also called for expanding counter-cyclical capacity and encouraging collaboration with the African diaspora to boost investment and co-create solutions. “This, distinguished ladies and gentlemen, is the roadmap to an Africa that controls its own narrative and owns its own destiny. An Africa that does not wait to be defined by others, but defines itself through vision, resolve, and unity of action,” he emphasised.

Elombi, who has taken over as the 4th President of the pan-African Multilateral Development Bank following his selection by the board at the general shareholders meeting in June, reaffirmed Afreximbank’s preferred creditor status as an essential safeguard for Africa’s ability to finance its own development. Cautioning against narratives that question the credibility of African institutions, he noted that such criticism often arises “not because we fail, but because we succeed.” Afreximbank, he noted, has disbursed over $155bn in the past decade, including $18.7bn in 2024 alone. “These are not just numbers,” he said. “They represent jobs, freedom, and hope. They are living proof of what Africa can accomplish when trust is matched by capacity.” Elombi argued that the real challenge facing the continent is not risk, but perception. “Africa is not merely bankable; Africa is dependable,” he said.

Elombi also paid tribute to Dr. Babacar Ndiaye, the fifth president of the AfDB and one of the founders of Afreximbank, describing him as a man “whose vision turned words into action.” Ndiaye, he said, believed that Africa’s progress depended on institutions built, financed, and led by Africans, a conviction that gave rise to Afreximbank, Shelter Afrique Development Bank, and the African Business Roundtable. “Dr. Ndiaye understood that true independence means having the capacity to stand on our own and to shape our own future, no matter how the world around us changes,” he said. Elombi reaffirmed Afreximbank’s commitment to Ndiaye’s legacy, stressing that the agenda must continue “until the task of development is significantly achieved”.

During a fireside chat jointly moderated by Anver Versi, editor of New African magazine and Omar Ben Yedder Group Publisher and Managing Director, IC Publications, Dr. Misheck Mutize, Lead Expert, Country Support on Rating Agencies, Africa Union stressed the importance of preserving the preferred creditor status of Africa’s development finance institutions. He explained that the preferred creditor status is a long-standing principle enjoyed by traditional multilaterals like the IMF and World Bank which allows such institutions to lend counter-cyclically, continuing to support economies even in times of crisis. For Africa’s regional and continental financial institutions, he said, this principle is not a privilege but a right embedded in their founding treaties, as they too were established by member states to bridge financing gaps and fund essential infrastructure and development projects.

Dr. Mutize cautioned, however, that the validity of PCS for African multilaterals has come under increasing scrutiny from international credit rating agencies, especially following a few sovereign defaults on the continent. He rejected the notion that African development banks must offer concessional loans to qualify for PCS, arguing instead that these institutions perform a unique public mission – blending developmental purpose with financial sustainability. “The preferred creditor status lies at the core of Africa’s financing ecosystem,” he said. “It ensures our institutions can continue to lend when others retreat, sustain development momentum, and access global capital on fair terms.”

For her part, Professor Lisa Sachs, Director of the Columbia Center on Sustainable Investment, advocated for reforms to the global financial system, which she said was “completely perverse and fundamentally broken.” She stressed that Africa’s development requires long-term, affordable finance, which is currently constrained by a global risk assessment framework that misrepresents Africa’s creditworthiness and growth potential. “The IMF acknowledges that Africa is the fastest-growing region in the world,” she said, “yet at the same time advises African governments not to borrow and invest. That contradiction shows how broken the system is.” Sachs said new international partners such as those in Asia and the Global South, who recognise Africa’s promise and are willing to build equitable financial partnerships that align with the continent’s development ambitions, offer a hopeful alternative for the continent.

Adding his voice, Professor Kako Nubukpo, formerly Dean of the Faculty of Economics and Management at the University of Lome stressed that shifting global perceptions of Africa’s risk “must begin with us,” and called for stronger governance and transparency to rebuild confidence. “We need to improve the perception that the rest of the world has of risk in Africa,” he said, warning against “a dangerous discourse that seems to prioritise mediocrity.” 

He further emphasised the need for genuine financial sovereignty, noting that “you can’t ask permission from the financial market to build a hospital.” True independence, he argued, will come only when African leaders “show vision, the ability to lead, and the courage to evaluate what we are doing.”

This year’s Babacar Ndiaye Lecture was the 9th in the series held in honour of the late Ndiaye, who was the driving spirit behind the establishment of Afreximbank and other key pan-African institutions. It was held under the theme “Leveraging Global Africa’s Capital for Development: The Imperative for Stronger African Financial Institutions amid Geo-economic Shifts” and was attended by policy makers and business leaders from the continent and the United States where it was held.

Distributed by African Media Agency (AMA) on behalf of Afreximbank.

About Afreximbank

African Export-Import Bank (Afreximbank) is a Pan-African multilateral financial institution mandated to finance and promote intra- and extra-African trade. For over 30 years, the Bank has been deploying innovative structures to deliver financing solutions that support the transformation of the structure of Africa’s trade, accelerating industrialisation and intra-regional trade, thereby boosting economic expansion in Africa. A stalwart supporter of the African Continental Free Trade Agreement (AfCFTA), Afreximbank has launched a Pan-African Payment and Settlement System (PAPSS) that was adopted by the African Union (AU) as the payment and settlement platform to underpin the implementation of the AfCFTA. Working with the AfCFTA Secretariat and the AU, the Bank has set up a US$10 billion Adjustment Fund to support countries effectively participating in the AfCFTA. At the end of December 2024, Afreximbank’s total assets and contingencies stood at over US$40.1 billion, and its shareholder funds amounted to US$7.2 billion. Afreximbank has investment grade ratings assigned by GCR (international scale) (A), Moody’s (Baa2), China Chengxin International Credit Rating Co., Ltd (CCXI) (AAA), Japan Credit Rating Agency (JCR) (A-) and Fitch (BBB-). Afreximbank has evolved into a group entity comprising the Bank, its equity impact fund subsidiary called the Fund for Export Development Africa (FEDA), and its insurance management subsidiary, AfrexInsure (together, “the Group”). The Bank is headquartered in Cairo, Egypt.

Media Contact:

Vincent Musumba

Communications and Events Manager (Media Relations)

Email: press@afreximbank.com

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Opinion

The divergent approaches of the IMF and World Bank in Malawi: A comprehensive analysis

Maravi Post Reporter

By Jones Gadama

Malawi has long been a focal point for international financial institutions, particularly the International Monetary Fund (IMF) and the World Bank.

These institutions play crucial roles in shaping the economic landscape of developing nations, providing financial assistance, policy advice, and technical support.

However, their approaches and focus can differ significantly, as evidenced by recent developments in Malawi.

The World Bank’s approval of a $350 million funding package for the Mpatamanga Hydropower Project contrasts sharply with the IMF’s suspension of its Extended Credit Facility due to concerns over fiscal discipline and foreign financial policy.

This analysis delves into the implications of these contrasting actions, exploring the motivations, methodologies, and potential outcomes of the IMF and World Bank’s engagements in Malawi.

The World Bank’s commitment to funding the Mpatamanga Hydropower Project underscores its focus on infrastructure development and energy security in Malawi.

The project aims to enhance the country’s power generation capacity, which is critical for economic growth and development. Malawi has faced chronic energy shortages, hampering industrial growth and limiting access to electricity for households.

By investing in hydropower, the World Bank seeks to address these challenges, promote sustainable energy solutions, and stimulate economic activity. The funding package not only represents a significant financial investment but also reflects the World Bank’s broader strategy of fostering development through infrastructure projects that can have a multiplier effect on the economy.

In contrast, the IMF’s recent suspension of its Extended Credit Facility highlights a more stringent approach focused on macroeconomic stability and fiscal discipline.

The IMF’s decision was driven by concerns over Malawi’s fiscal management and foreign financial policy, which it deemed unsatisfactory. The IMF typically emphasizes the importance of sound economic policies, including budgetary discipline, effective governance, and transparency.

By suspending its support, the IMF aims to signal the need for Malawi to implement necessary reforms to restore fiscal stability and build investor confidence. This approach reflects the IMF’s broader mandate to ensure that countries maintain sustainable economic policies, which is essential for long-term growth and stability.

The differing focuses of the IMF and World Bank in Malawi can be attributed to their distinct mandates and operational philosophies. The World Bank primarily aims to reduce poverty and promote sustainable development through long-term investments in infrastructure, education, and health. Its projects often have a direct impact on the lives of citizens, providing essential services and creating jobs.

The World Bank’s approach is generally more flexible, allowing for a focus on specific projects that can yield immediate benefits for the population.

On the other hand, the IMF’s mandate revolves around maintaining global financial stability and providing short-term financial assistance to countries facing balance of payments crises. The IMF’s approach is often characterized by conditionality, requiring countries to implement specific economic reforms in exchange for financial support.

This can lead to tensions, as the reforms demanded by the IMF may not always align with the immediate needs of the population. In Malawi’s case, the IMF’s suspension of the Extended Credit Facility serves as a wake-up call for the government to prioritize fiscal discipline and sound economic management.

The implications of these contrasting approaches are significant for Malawi’s economic trajectory. The World Bank’s investment in the Mpatamanga Hydropower Project has the potential to transform the energy landscape, providing a reliable power supply that can drive industrialization and economic growth. Improved energy access can enhance productivity, attract foreign investment, and ultimately contribute to poverty reduction.

However, the success of such projects often hinges on the government’s ability to manage resources effectively and ensure that the benefits of increased energy capacity are equitably distributed.

Conversely, the IMF’s suspension of its Extended Credit Facility raises concerns about Malawi’s ability to maintain macroeconomic stability in the face of fiscal challenges. Without the support of the IMF, Malawi may struggle to finance its budget, leading to potential cuts in essential services and social programs.

The suspension also risks undermining investor confidence, as it signals to the market that the government may not be adhering to sound economic principles. This could deter foreign investment, further exacerbating the country’s economic challenges.

The contrasting approaches of the IMF and World Bank also highlight the complexities of international financial assistance. While the World Bank focuses on long-term development goals, the IMF emphasizes the need for immediate fiscal discipline.

This divergence can create challenges for Malawi’s government, which must navigate the demands of both institutions while addressing the pressing needs of its citizens. The government faces the difficult task of implementing necessary reforms to satisfy the IMF while simultaneously pursuing development projects that can improve the quality of life for its population.

Moreover, the relationship between Malawi and these international financial institutions is influenced by broader geopolitical dynamics. The IMF and World Bank operate within a global financial system that often prioritizes the interests of developed nations.

This can lead to a perception that the conditions imposed by the IMF are overly stringent and may not take into account the unique challenges faced by developing countries like Malawi. Critics argue that the IMF’s focus on austerity measures can exacerbate poverty and inequality, undermining the very goals of economic stability and growth.

In light of these challenges, it is essential for Malawi’s government to adopt a balanced approach that addresses the concerns of both the IMF and World Bank. This may involve implementing fiscal reforms that enhance transparency and accountability while simultaneously investing in infrastructure projects that can drive economic growth.

By fostering a collaborative relationship with both institutions, Malawi can work towards achieving its development goals while maintaining macroeconomic stability.

Furthermore, the government should engage in dialogue with civil society and local stakeholders to ensure that development projects align with the needs and priorities of the population. This participatory approach can help build public support for necessary reforms and foster a sense of ownership over development initiatives. By prioritizing inclusive growth and equitable resource distribution, Malawi can create a more resilient economy that is better equipped to withstand external shocks.

The contrasting approaches of the IMF and World Bank in Malawi reflect the complexities of international financial assistance and the challenges faced by developing countries. While the World Bank’s investment in the Mpatamanga Hydropower Project offers a pathway to improved energy access and economic growth, the IMF’s suspension of its Extended Credit Facility underscores the importance of fiscal discipline and sound economic management.

For Malawi to navigate these divergent paths successfully, it must adopt a balanced approach that prioritizes both immediate fiscal stability and long-term development goals. By fostering collaboration with international financial institutions and engaging with local stakeholders, Malawi can work towards a more sustainable and inclusive economic future.