© 2019 - International Centre for Investigative Reporting
AFDB, other development banks contributing to debt burdens in developing economies
DAVID Malpass, World Bank President said the culture of provision of quick loans to heavily indebted economies was worsening the debt situations in the poor countries.
Malpass on Monday during a World Bank-International Monetary Fund debt forum in Washington noted that the Asian Development Bank, the African Development Bank, and the European Bank for Reconstruction and Development were contributing to debt problems.
He said the African Development Bank and the Asian Development Bank release huge amounts of funds in billions of dollars into fiscal challenging situations within its regions.
“We have a situation where other international financial institutions and to some extent development finance institutions as a whole, certainly the official export credit agencies, have a tendency to lend too quickly and to add to the debt problem of the countries,” Malpass said.
He said the Asian Development Bank was “pushing billions of dollars” into a fiscally challenging situation in Pakistan while the African Development Bank was doing the same in Nigeria and South Africa.
Email sent to Emeka Anuforo, a spokesman with the AFDB by The ICIR pertaining to the new assertion by the IMF boss on the lending spree was yet to be responded to at the time of filing this report.
Meanwhile, in the first month of 2020 alone, the AFDB has approved over $35 million in grants and loans for development and purposes in the West African region.
By 1 July the World Bank’s fund for the poorest countries, the International Development Association, would be implementing a new set of lending rules as it sets to unlocks a new round of funding expected to make some $85 billion in loans and grants available.