DEVELOPMENT COMMITTEE (Joint Ministerial Committee of the Boards of Governors of the Bank and the Fund On the Transfer of Real Resources to Developing Countries) NINETY-SIXTH MEETING WASHINGTON, D.C. – OCTOBER 14, 2017 DC/S/2017-0050 October 14, 2017 Statement by H.R.H. Hlangusemphi Dlamini Minister of Economic Planning and Development Swaziland For Africa Group 1 Constituency Statement by H.R.H. Hlangusemphi Dlamini Minister of Economic Planning and Development Swaziland For Africa Group 1 Constituency 96th Meeting of the Development Committee October 14, 2017 Washington, D.C. 1. Introduction External factors weighed heavily on our efforts to eradicate poverty in Sub-Saharan Africa (SSA) in 2016. Per capita income dropped, as regional growth fell to a twenty-year low of 1.3 percent in 2016, from 3.0 percent in 2015. This was against a backdrop of low commodity prices, weak external demand, drought, and security problems. While commodity exporters were most impacted, growth in commodity importers remained broadly stable. Growth is, however, projected to recover in the medium-term, driven by modestly recovering commodity prices, strengthening external demand and the end of the drought in several countries. Notwithstanding this outcome, we, reaffirm our commitment to redouble our efforts in implementing critical reforms that are needed to ensure macro-economic stability and sustained growth, leading to the transformation of our economies and to the achievement of the Sustainable Development Goals (SDGs) targets. Given the prospects of economic recovery in the region and aided by scaled up financing package under IDA18, we look forward to enhancing our collaboration with the WBG across several areas critical to the attainment of the twin goals. Noting the scale of the challenges facing our economies, including the external downside risks to the economic outlook, such as climate change, pandemics, and fragility, we call on the WBG to strengthen its strategic engagement in Africa across its client groups, as espoused in the Forward Look. 2. World Development Report (WDR) 2018: Learning to Realize Education’s Promise Investing in human capital development in SSA is imperative to the region’s quest to build a human capital stock that will take advantage of the demographic dividend and fundamentally transform the Continent. Statistics, however, indicate that 17 million of Africa’s 128 million school-aged children, will never attend school. Even more shocking is data indicating that another 37 million attending school, learn so little while in school, that they will not be better off than those kids who never attended school. This is indeed a crisis for our region, and requires urgent and decisive intervention, if we are to fulfil our goals of ending extreme poverty and boosting shared prosperity, as well as meet the SDGs targets. We firmly believe that the learning crisis in our countries can be successfully addressed if all stakeholders collaborate in developing reliable and actionable policy measures to significantly improve our learning outcomes. We, therefore, urge the WBG and other development partners to support our efforts to drive this agenda by allocating the appropriate resources and developing the right instruments to support human capital development targeting the quality of learning and the acquisition of relevant skills, particularly on vocational, science and technology education. We further call on the WBG to leverage the fourth revolution of Information and Communication Technology (ICT), as they work collaboratively with our countries to implement the relevant policy and institutional reforms in the education sector. 3. Maximizing Finance for Development: Leveraging the Private Sector for Growth and Sustainable Development We deem Maximizing Finance for Development (MFD) as critical and at the center of Africa’s transformational agenda, especially regarding bridging the massive infrastructure gap in our countries. We call on the WBG and the other MDBs to intensify their commitment of moving from “billions” in ODA, to “trillions” using a broad range of instruments to advance the SDGs. We call for the urgent operationalization of the Cascade Approach which crowds-in private finance and optimizes the use of scarce public resources. The Cascade Approach should incorporate local private sectors through inclusive business models. We call on the WBG to also direct its efforts on Domestic Resources Mobilization (DRM) targeting strengthening tax administration, curbing illicit financial flows and the development of domestic capital markets. 4. Progress on Shareholding Review We welcome the Progress Report on Shareholding Review as it raises important issues on rebalancing shareholding at the World Bank and the capital adequacy needs of IBRD and IFC. We note that more work needs to be done to achieve the objectives of the Shareholding Review, and that this will have implications on the earlier anticipated timeframe for approval by Governors. We, however, strongly believe that a comprehensive set of proposals acceptable to the membership should be presented to Governors for approval at the 2018 Spring Meetings. In this regard, Africa is calling for a bigger, better, and agile World Bank, with the capacity to deliver on the Forward Look. 5. Forward Look Update Implementation We welcome the update on the implementation of the Forward Look and the several positive steps taken by the WBG over the last year to become a bigger, better, and agile institution. We acknowledge the historic IDA18 replenishment and the scale up in the policy package for IDA. We, therefore, call on the World Bank to urgently operationalize the various instruments and windows under IDA18, especially the Private Sector Window (PSW), the scaled-up support to Fragile and Conflict Affected States (FCS), and the Refugee Sub-Window. We also urge the Bank to deploy staff with the right set of skills and the incentives to ensure strong IDA18 delivery. We, however, note with concern that the update does not provide any proposals for engagement with Lower Middle-Income Countries (LMICs), where more than 500 million of the world’s 750 million poor people live. We, therefore, call on the WBG to come up with concrete strategies to engage LMICs. 6. World Bank’s Response to Pandemics and Natural Disasters We wish to appreciate the WBG’s timely response to the recent famine that affected several countries in SSA, where more than 20 million people faced starvation. The recurring droughts, floods, and cyclones have precipitated Africa’s poverty and created long-lasting poverty traps. The Bank launched the Africa Climate Business Plan (ACBP) during COP21 meant to increase climate resilience and low carbon development by raising US$19 billion by 2020 and generating one gigawatt solar energy capacity. We, therefore, urge the Bank to urgently step up the implementation of the ACBP. Similarly, we commend the WBG for successfully launching the Pandemic Emergency Financing Facility, which addresses structural gaps in the global framework for rapid pandemic response. The PEF will provide more than $500 million to cover developing countries against the risk of pandemic outbreaks over the next five years, through a combination of bonds and derivatives priced today, a cash window, and future commitments from donor 2 countries for additional coverage. In this regard, we congratulate the World Bank for recently launching specialized bonds aimed at providing financial support to the PEF. This marks the first time that World Bank bonds are being used to finance efforts against infectious diseases, and the first time that pandemic risk in low-income countries is being transferred to the financial markets. 7. Refugees The Refugees and Internally Displaced People (IDPs) crises in some of our countries is increasingly worsening, with the continued large influx of people into Ethiopia, Kenya, Sudan, and Uganda, among other countries. This has worsened the humanitarian needs of the refugees especially basic food, shelter, education, health, and water. The increased influx of refugees is also putting significant economic and social pressure on host countries. We therefore, urge the WBG to expedite the implementation of the IDA18 Refugee Sub-Window to alleviate the burden on hosting countries. We also urge the WBG to come up with a strategy for supporting and addressing the situation of IDPs. 8. Transformation of Agriculture in Africa Agriculture remains the backbone of our economies and the rejuvenation of the sector will make significant impact on poverty eradication, economic diversification, and job creation. Africa has 65 percent of the world’s uncultivated arable land, but imports food worth US$35 billion every year. This is expected to increase to US $110 billion by 2025. It will, therefore, be crucial to urgently develop and implement a One WBG Action Plan to transform SSA’s agriculture sector into a globally competitive, inclusive, and business orientated sector which creates wealth and improves the quality of the lives of rural farmers. The Action Plan should focus on increasing productivity; realizing the value of increased production; increasing investment into enabling hard & soft infrastructure such as electricity and roads in the agricultural production areas; catalyzing flows of increased agricultural finance; creating an improved agribusiness environment; increasing inclusivity, sustainability, and nutrition; and coordinating stakeholders in partnership to drive the transformation. 9. Regional Integration Regional integration remains a high priority in our quest to sustainably transform the economies of Africa, through broadening product and factor markets, boosting competitiveness, diversifying economic activities, and creating jobs, particularly for the youth and women. Against this backdrop, we believe that the new WBG’s strategy to engage with Africa should seek to harness the benefits of regional integration. We call on the World Bank to expeditiously finalize the new Regional Integration Strategy for Africa, which will support investments in transformative and strategic regional projects, particularly the 16 priority projects identified by the New Economic Program for Africa’s Development (NEPAD), under the Program for Infrastructure Development in Africa (PIDA). While recognizing the country-based engagement model of the WBG, we urge for stronger collaboration with our regional economic communities, such as SADC, EAC, ECOWAS, and COMESA. 10. Conclusion While the fall in commodity prices, is slowly beginning to wane, fiscal space for Africa’s commodity exporters remains highly constrained. We, however, remain committed to continue implementing policies that improve the business climate and support private sector investments which are critical to boosting sustainable and inclusive long-term growth. Going forward, we commit to implement policies which promote economic transformation and regional integration, as well as to address the structural impediments to regional trade. This will assist to counteract the negative effects of rising global protectionism. We, therefore, call on the WBG to significantly step up the implementation of the Forward Look which will be 3 critical to eliminating extreme poverty by 2030 and boosting shared prosperity, including sustainable and inclusive growth, investment in human capital, and strengthening resilience. 4