Tag: World Bank

World Bank Now Reducing Lending To China After Trump Outburst

The bank, which is led by former US Treasury official David Malpass, defended its approach in a brief statement.

 

The World Bank said Saturday its lending to China has fallen sharply and will continue to be pared back, after US President Donald Trump demanded it stop altogether.

“Why is the World Bank loaning money to China? Can this be possible? China has plenty of money, and if they don’t, they create it. STOP!” Trump wrote on Twitter Friday.

The bank, which is led by former US Treasury official David Malpass, defended its approach in a brief statement.

“World Bank lending to China has fallen sharply and will continue to reduce as part of our agreement with all our shareholders including the United States.

“We eliminate lending as countries get richer,” it said.

Trump was reiterating a position long held by his administration, including Malpass prior to his election as the current head of the World Bank.

Treasury Secretary Steven Mnuchin told US lawmakers Thursday that the United States “has objected” to the institution’s multi-year program of loans and projects in China.

That program, which includes plans to reduce lending to China, was adopted on Thursday.

The program “reflects the evolution of our relationship with China,” Martin Raiser, World Bank Country Director for China, said on Thursday. “Our engagement will be increasingly selective.”

Trump’s very public stance comes amid negotiations between Washington and Beijing seeking to end the US president’s 18-month-long trade war, which is aimed at forcing China to make concessions on protecting American businesses and reducing its trade surplus.

There is a great deal of uncertainty about the date of a possible partial agreement, which Trump said was imminent in October.

 

AFP

World Bank Ends Funding To Uighur Schools In China

The World Bank announced on Monday it was ending a project to fund vocational schools in China following allegations of mistreatment of minority Muslim Uighurs.

The World Bank launched another review of the program in late August after Foreign Policy magazine reported that a school that benefited from a tranche of the $50 million loan to China bought “barbed wire, gas launchers, and body armor.”

The Washington-based development lender said it launched another review in the wake of the charges but “did not substantiate the allegations.”

However, “In light of the risks associated with the partner schools, which are widely dispersed and difficult to monitor, the scope and footprint of the project is being reduced.”

“Specifically, the project component that involves the partner schools in Xinjiang is being closed,” the World Bank said in a statement.

China’s treatment of the Uighurs — a mostly Muslim, Turkic-speaking minority concentrated in the tightly-controlled northwestern Xinjiang region — has come under growing scrutiny.

Rights groups and experts say more than one million mostly Muslim ethnic minorities have been interned in re-education camps in Xinjiang, where they are being tortured and forced to renounce their religion.

China initially denied the existence of the camps before admitting to running what it called “vocational education centers,” which it presented as necessary to combat religious extremism and boost employment.

World Bank funding to five schools in the project will, however, continue.

AFP

Nigeria Can Achieve Top 70 Doing Business Index By 2023, Says Buhari

Cameroonian President Congratulates Buhari On Re-Election
President Muhammadu Buhari (file)

 

 

President Muhammadu Buhari has commended the progress recorded by Nigeria on the latest World Bank’s 2020 Ease of Doing Business Index (DBI).

The President reacted in a statement on Thursday by his Special Adviser on Media and Publicity, Mr Femi Adesina, following the announcement that Nigeria moved up by 15 spots from the 146th position it was last year.

The report also noted that Nigeria was one of the top 10 most improved economies in the world under the period of review.

Welcoming the announcement, President Buhari said, “The movement of 15 places to 131, as well as the recognition being given to Nigeria as one of the top 10 most improved countries, that have implemented the most reforms this year, is significant because we were not even able to achieve some of the key reforms we had pursued, but what we have done so far is being recognised.

“This validation confirms that our strategy is working and we will continue to push even harder to deliver more impactful reforms.”

READ ALSO: Nigeria Moves Up By 15 Spots On World Bank’s Ease Of Doing Business Index

The President noted the impending ratification of the Companies and Allied Matters Bill and the introduction of the Business Facilitation (Omnibus) Bill, 2019, which he said were in view along with other pending and ongoing regulatory, judicial and sub-national reforms.

He added, “The announcement by the World Bank indicates that our mandate to move into the top 70 doing business destinations by 2023 remains achievable.”

Earlier, the Minister of Industry, Trade and Investment and Vice Chairman of the Presidential Enabling Business Environment Council (PEBEC), Niyi Adebayo, briefed the President on the ranking.

He noted that the steady improvement in the nation’s ease of doing business score and rank was a testament to the reforms implemented by the present administration since its inception.

“The PEBEC works towards the fulfillment of the projections of the Economic Recovery and Growth Plan (ERGP 2017-2020), which is striving to deliver sustainable economic growth in Nigeria by restoring growth, investing in our people, and building a competitive economy as we work towards delivering Mr President’s mandate of bringing 100 million people out of poverty.

“The 2020 Doing Business report from the World Bank has reaffirmed the commitment of the newly constituted PEBEC to making Nigeria a progressively easier place to do business and removing the bureaucratic constraints to doing business in the country as we forge ahead in this Next Level,” the minister said

On her part, the Special Adviser to the President on Ease of Doing Business and PEBEC Secretary, Dr Jumoke Oduwole, believes the private sector remains the fulcrum of the ease of doing business interventions.

She said, “We are committed to more engagements among reform-implementing organs of government and the private sector players, and we are happy to see that these have resulted in a more favourable validation of the reforms by the private sector.”

“This result will serve as encouragement to sustain the deepening of these reforms and make it even more tangible for businesses and the citizenry.

“The PEBEC is focused on delivering even more substantive reforms for the improvement of the general business climate,” the presidential aide added.

Nigeria Moves Up By 15 Spots On World Bank’s Ease Of Doing Business Index

A file photo of Nigerians walking on a street in Lagos State.

 

 

Nigeria has moved up by 15 places to 131 in the World Bank’s Ease of Doing Business ranking from the 146th position it was in 2018.

This comes after the World Bank ranked the country in the top 10 economies where business climates improved the most some weeks ago.

According to the World Bank Group’s Doing Business 2020 study, governments of 115 economies around the world launched 294 reforms over the past year.

The report explained that this made doing business easier for the domestic private sector in the countries, paving the way for more jobs, expanded commercial activity, and higher incomes for many.

READ ALSO: Operatives Arrest Another 26 FRSC Officials For Extortion On Highways

World Bank President, David Malpass, said governments can foster market-oriented development and broad-based growth by creating rules that help businesses launch, hire, and expand.

He added that removing barriers facing entrepreneurs generates better jobs, more tax revenues, and higher incomes, all of which were necessary to reduce poverty and raise living standards.

 

Meanwhile, China and India made the top 10 list of governments that have done the most in the past year to improve the ease of doing business in their countries.

China made the top 10 list for the second year in a row, despite a bitter trade war in which the United States has demanded reforms from Beijing to protect intellectual property and open its economy further to American businesses.

The Asian country leapfrogged France to take the 31st spot in the ranking, also moving up 15 places just as Nigeria.

India, on the other hand, landed on the most-improved list for the third year in a row, moving up by 14 places to number 63 in the global rankings.

The report noted that the country made it easier to start a business by abolishing filing fees, lowering the time and cost of seeking construction permits and making trade easier with port improvements and an improved electronic platform for submitting documents.

The other seven economies where business climates improved the most were Saudi Arabia, Jordan, Togo, Bahrain, Tajikistan, Pakistan, and Kuwait.

New Zealand continues to top the global rankings, while Singapore, Hong Kong, Denmark, and Korea are right behind with the United States, Georgia, the United Kingdom, Norway and Sweden completing the top 10 list.

Over 13,000 People To Attend World Bank, IMF Meeting In US

 

No fewer than 13,000 people are expected at this year’s meeting of the World Bank and the International Monetary Fund.

The annual event, which opens on Tuesday, will take place in Washington D.C., the United States.

It will bring together governors of various central banks, ministers of finance and development, private sector executives, civil society, and academics.

Participants are expected to discuss issues of global concern including the world economic outlook, global financial stability, poverty eradication, jobs and growth, economic development, and aid effectiveness among others.

Top government officials from Nigeria are also expected at the meeting and would possibly share experiences on what the Federal Government has been doing to address income inequalities, job creation, and improve the nation’s human resources.

The meeting is also expected to offer an opportunity for civil society organisations to share their views and interact with policymakers in a global setting.

World Bank Slashes 2019 Growth As Global Trade Slackens

 

The World Bank slashed its global growth forecasts for this year in a report released Tuesday that portrayed a world gripped by deepening trade conflict, tumbling confidence and increasingly skittish investment.

Although the global development lender currently expects a modest recovery 2020 and 2021, the bank said in its semi-annual report that a lot will have to go right for this to happen.

Instead, the growing risks suggest the outlook could instead grow darker still.

The greatest danger on the horizon is the prospect of worsening trade clashes between major world economies — a specter that rose again last week when US President Donald Trump announced fresh punitive duties on Mexican goods in a dispute over immigration policy.

The world economy is now expected to expand by 2.6 percent this year, three tenths of a percentage point lower than the January forecast, and well below the three percent growth seen in 2018, according to the Global Economic Prospects report.

The World Bank also sounded the alarm about rising debt levels and warned emerging economies they could soon regret the decision to borrow in search of a growth boost.

Newly-installed World Bank President David Malpass, who in his previous position with the US Treasury participated in Trump’s stalled trade negotiations with China, said global growth is “fragile” and the slowdown jeopardizes progress in battling world poverty.

“The global economic outlook, in both the near and long term, is confronting substantial challenges,” he told reporters.

The new forecast was decidedly gloomier than the latest outlook by the International Monetary Fund, released in April, but which likewise predicted a slowdown and warned of the risks posed by trade conflicts.

“The bottom line is that the global economy is coming to a crossroads,” said World Bank economist Ayhan Kose, who oversaw the report, told AFP.

“We need to find ways to stabilize growth and I think further escalation of these trade tensions is now the number one risk that could actually weigh on the outlook,” he told AFP.

World trade volume also is expected to drop off sharply, growing by 2.6 percent this year, the slowest pace since the global financial crisis and a full percentage point lower than January’s forecast.

– ‘Panic button?’ –
In East Asia and the Pacific, total economic output is likely to drop below six percent for the first time since the Asian financial crisis more than 20 years ago.

China’s forecast is little changed, with growth projected to slow to 6.2 to percent this year.

The forecast for the United States is unchanged, with GDP growth slowing to 2.5 percent this year before weakening to 1.7 percent in 2020, though still considerably stronger than other advanced economies.

But American exports to Europe and Asia have seen an “especially acute” slowdown, and conditions in the eurozone economic have “deteriorated rapidly” as exports to China, central Asia and elsewhere have shrunk, according to the report.

Latin America’s top two economies, Brazil and Mexico, have taken sharp turns for the worse.

The report did not take Trump’s latest tariff threat against Mexico into account — it was announced Friday and is due to take effect June 10 — but the World Bank cut the forecast by 0.3 points, calling for expansion of just 1.7 percent in 2019.

If Trump follows through on his threat, tariffs on all Mexican goods would hit 25 percent in October.

“The big question is, are we pushing the panic button?” Kose said.

“The answer at the moment is no but I think if tensions escalate further, we have to push the panic button and get ready for a much deeper slowdown.”

The forecast also sliced 0.7 percent off its outlook for Brazil, cutting it to 1.5 percent.

Kose highlighted concerns over rising debt, saying that since 2007 sovereign debt among emerging and developing economies had risen on average by 15 percent.

These countries should be “extremely careful” not to allow current low interest rates to entice them into overindulging in more debt, and should instead opt for more reforms that can stimulate investment.

“When you accumulate debt, it makes you more vulnerable to crisis, it limits your policy space and then ultimately, you never know when the interest rate’s going to increase,” he said.

Removing Fuel Subsidies Is The Right Way To Go, IMF Tells Nigeria

The Managing Director, IMF, Christine Lagarde at a press conference on Thursday, during the on-going joint annual spring meetings with the World Bank in Washington DC.

 

The International Monetary Funds (IMF) has asked the Nigerian Government to consider the complete removal of fuel subsidy.

IMF Managing Director, Christine Lagarde, who said this at a press conference on Thursday, noted that it was the right way to go.

Addressing a joint annual spring meeting of the World Bank in Washington DC, United State, she explained that the move would save a lot fiscally and in terms of human lives.

“We believe that removing fossil fuel subsidies is the right way to go,” Lagarde affirmed.

She added, “If that was to happen, then there would be more public spending available to build hospitals, to build roads, to build schools, and to support education and health for the people.”

READ ALSO: IMF, World Bank Urge Caution With China Loans

The IMF boss revealed that the figures spent on subsidy from 2015 were staggering.

She, however, urged the government to put in place a social protection safety net while the subsidy was being removed, to reduce its effect on the people.

“If you look at our numbers from 2015, it is no less than about $5.2 trillion that is spent on fuel subsidies and the consequences thereof,” she said.

Lagarde added, “And the Fiscal Affairs Department has actually identified; you know how much would have been saved fiscally but also in terms of human life if there had been the right price on carbon emission as of 2015. The numbers are quite staggering.

“Now, how this is done is more complicated because there has to be a social protection safety net that is in place so that the most exposed in the population do not take the brunt of the removal of subsidies principle. So that is the position we take.”

According to the IMF boss, with the low revenue mobilisation that exists in Nigeria in terms of tax-to-GDP, the nation is amongst the lowest.

She said there was a need for “a real effort” to maintain a good public finance situation for the country and in order to direct investment towards health, education, and infrastructure.

The IMF had in a recent ‘Staff Article IV consultation report on Nigeria’ made recommendations that the fuel subsidy should be removed.

American David Malpass Named World Bank President

David Malpass speaks after US President Donald Trump announced his candidacy to lead the World Bank during an event in the Roosevelt Room of the White House in Washington, DC.  Brendan Smialowski / AFP

 

David Malpass, a senior US Treasury official in President Donald Trump’s administration, was unanimously chosen Friday as the next president of the World Bank.

The selection of Malpass by the bank’s board of directors followed an “open, transparent” nomination process in which citizens of all membership countries were potentially eligible, the bank said in a statement.

But since the bank’s creation following World War II, all of its presidents have been American men, following an unwritten rule that also ensures European leadership at the top of its sister institution, the International Monetary Fund.

The announcement came as expected just prior to next week’s joint spring meetings of the World Bank and the IMF.

Malpass begins his five-year term on Tuesday, replacing former President Jim Yong Kim, whose surprise departure in February came not even halfway through his second term.

Malpass had been the lone candidate for the job and his nomination by Trump earlier this year sparked outrage among critics, who saw it as an affront to the global anti-poverty lender’s very mission.

The 63-year-old US Treasury official in charge of international affairs has been a strident critic of global financial institutions — calling their lending practices “corrupt” and ineffective, and complaining they are overly generous to China.

He has softened his message recently, however, saying he is committed to the bank’s mission of eliminating extreme poverty and that reforms enacted last year as part of a $13 billion capital increase addressed many of his criticisms.

In recent years, emerging market countries have challenged the unwritten arrangement on World Bank and IMF leadership, demanding a more open, merit-based selection process.

The bank has been at pains to stress that it has heard such criticisms and now allows a more open process. But the few non-American candidates in recent years have received little support from major bank shareholders.

Many, including former Treasury officials from both political parties, have sharply criticized Malpass and his qualifications.

They pointed to his failure to foresee the global financial crisis during his time at the now-defunct investment bank Bear Stearns and his opposition, which later proved unjustified, to post-crisis Federal Reserve policies.

Malpass previously also held a senior role in the US State Department for Latin American affairs.

“David will be an exceptional leader of the World Bank and I look forward to working with him in his new role,” US Treasury Secretary Steven Mnuchin said on Twitter.

AFP

ECA, World Bank Say Innovation Key To Addressing Africa’s Job Challenge

ECA, World Bank Say Innovation Key To Addressing Africa’s Job Challenge

 

In order to provide enough jobs for its growing youthful population, Africa must innovate.

This is the view of the Executive Secretary, Economic Commission for Africa (ECA), Vera Songwe, who proposed immediate action on all fronts to address the continent’s jobs challenge in a structural way.

In a statement issued by the Communications Section of the ECA, she says that with Africa’s rising population, estimated to increase to 1.7 billion by 2030, a growth rate of more than 8 per cent per annum is needed to create at least 120 million jobs for the youth entering the labour market between now and 2030.

Ms Songwe who was speaking in Addis Ababa, the Ethiopian capital, at a joint ECA-World Bank roundtable on jobs and economic transformation, said, “The question around jobs and economic transformation is one that almost every African leader is worrying about.”

“Africa is growing again but we need to do better and more. It is disheartening every day to see that more Africans are falling into poverty. That is why it is imperative that we are having this discussion of creating jobs on the continent.”

The event focused on three topical areas: digital transformation, trade and global value chains, and human capital for jobs.

Stressing the importance of innovation as a major force for economic growth and development, Ms Songwe added, “Digitalisation is, now more than ever, playing an important role in Africa’s economic transformation and has the potential to open opportunities to labour markets, moving beyond markets through the free movement of people.”

Ms Songwe also spoke about the need for African economies to stimulate adequate industrialisation through increased intra-African trade.

“As digitalisation and trade create new opportunities for economic transformation through jobs, it will be important for policymakers to recalibrate policies towards strengthening human capital. Policies geared towards a highly skilled, knowledgeable and healthier population are pertinent in ensuring prosperity and thereby reducing poverty on the continent,” she said.

In his own contribution, the Vice President for Development Finance at the World Bank, Akihiko Nishio, said the discussing on jobs and economic transformation was timely.

“For most developing countries and development institutions like ours, the need for more and better jobs remains a top development priority. Jobs are a source of income, a means of raising productivity, and for meeting the aspirations of hundreds of millions of people,” said Mr Nishio.

While admitting that there are challenges in meeting the job needs on the continent, Mr Nishio also pointed out the consequences of failure in tackling the issue.

“Failing to deliver good jobs for the growing youth population not only risks squandering the demographic dividend but raises significant social risks, contributing to fragility and driving young people to migrate abroad in search of better opportunities,” said Mr Nishio.

He said tackling the jobs challenge requires economic transformation, which involves “moving workers from lower to higher productivity activities led by a vibrant private sector and supported by public policy actions.”

El-Rufai Blasts Shehu Sani, Insists Senator Will Be Defeated

 

Malam Nasir Ahmad El-Rufai has said that Senator Shehu Sani is an opportunist who is not working in the best interest of the Kaduna people. 

The Kaduna state governor made this assertion in a discussion with Ladi Akeredolu-Ale on Channels Television’s Roadmap 2019.

He said what Shehu Sani is doing is to take “one’s advantage position to frustrate the development of a State” thus “putting politics above common sense”.

While claiming that the expectations and ambitions of the Kaduna state government have been realized to some extent, El-Rufai said the people were quite “disappointed by the attitude of the Senators representing” the state.

He claimed Shehu Sani and two other lawmakers representing Kaduna had frustrated the efforts of the state government to obtain a $350million loan which would have helped in the area of infrastructure.

Shehu Sani had in a similar interview spoken about a proposed loan of $350million which Kaduna state was to collect from the World Bank.

In the chat on that episode of Roadmap 2019, Sani said “Kaduna state wasn’t qualified for that loan because it was the second most indebted state in the country.

He said the state is indebted to “over $225million and he was asking us to approve $350million for him and then the state will be indebted to over half a billion dollars”.

The lawmaker representing Kaduna Central in the Senate went on to say that “a non-oil producing state with very low internally generated revenue” needed to be saved from the “Chains and shackles of debt” which “He (the governor)” was going to get them involved in.

Disagreeing with Senator Sani, Governor El-Rufa told Ladi Akeredolu-Ale that “Anyone WHO represents a people and does not want the benefits of those people is clearly an enemy of the people”.

The governor went to say that, Shehu Sani uses words without knowing their meaning, noting that “there is no way a state government can borrow without clearance from the debt management office of the Federal Republic of Nigeria”.

“There is no way the World bank will lend you or any other person money without doing their number,” El-Rufai said.

Questioning Senator Shehu Sani’s logic with regards to moving against the proposed World Bank loan, Governor El-Rufai asked, “Is Shehu Sani as knowledgeable or does he know enough economics or financial management to contest the judgment of these institutions?”

He concluded that all Shehu Sani has said is just to “Justify taking actions against the interest of 10 million people”.

Though agreeing that Kaduna has the second largest amount of foreign debt after Lagos, the governor, however, stressed that “what is important is not the level of debt but debt sustainability”.

The governor noted that he is working with the president and he is certain that soon enough the loan issue with the World Bank will be resolved, noting that he is confident with the resolution of some of the issues around financing, “we would be able to get to where we want to take Kaduna State in the shortest possible time”.

World Bank Cuts Global Growth Forecast Amid US-China Trade Conflict

World Bank Approves $350M Loan For Kaduna Govt

 

Growth of the world economy is expected to slow as the US-China trade conflict takes its toll and undermines confidence, the World Bank said Tuesday in its semi-annual forecast.

The World Bank cut the global GDP forecast to 2.9 per cent this year and 2.8 per cent in 2020, slightly below the previous forecast, but warned that risks were rising and urging policymakers to prepare for a storm.

US economic growth is expected to slow this year by four-tenths of a point, falling to 2.5 per cent down from 2.9 per cent in 2018, and to slow even further next year to 1.7 per cent, according to the Global Economic Prospects report.

World Bank President Jim Yong Kim Announces Resignation

 

World Bank President Jim Yong Kim announced Monday he would step down next month, more than three years before his current term was due to expire.

The decision ends Kim’s six-year tenure and may give US President Donald decisive influence over the future leadership of the global development lender.

“It has been a great honor to serve as president of this remarkable institution, full of passionate individuals dedicated to the mission of ending extreme poverty in our lifetime,” Kim said in a statement.

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Kim, who became president in 2012, is to join an as-yet unnamed firm focusing on investments in developing countries, the bank said in a statement, and will return to the board of Partners-in-Health, which he co-founded.

Under Kim’s leadership, the bank set the goal of eliminating extreme poverty by 2030 and ramped up financing.

Last year, it also won approval for a sharp $13 billion capital increase after acceding to requests from the Trump administration to curb loans to high-income countries like China.

Kim’s tenure was also marked by high levels of disaffection among World Bank staff, who chafed at a widespread internal restructuring that Kim began.

World Bank CEO Kristalina Georgieva will serve as interim president upon Kim’s February 1 departure, the bank said in a statement.