Money, currency is what drives the economy of a country, state or continent. With the recent visit of the World’s Bank President in Rwanda, the Premier aimed at addressing vital issues regarding financial institutions more so banks. Given that they steer the cash flow in the economy, a greater role seems to emerge from the President’s talk.
Dr Jim Yong King said that there will be a dynamic change in the banking sectors operation as the focus will turn to development as a fulcrum to greater influence and effect. The change would see that the levels of poverty, one of the mountains in the global economy be dealt with too.
Dr Kim made the disclosure yesterday at a public lecture at the Kigali Convention Centre, which focused on approaches to development.
The bank will invest less in initiatives that can be done commercially by the private sector, among the shifts to occur that could see countries’ access to World Bank Group funds affected.
The approach will also aim at de-risking countries as investments destinations to increase the interest by private sector investments, leaving the government to concentrate on initiatives that cannot be done commercially.
Dr Kim said the ultimate aim of the approach will be to maximise finance for adding value in development.
This approach, he said could fast track the financing of critical aspects on the continent such as infrastructure where the continent’s needs are estimated at about $93 billion.
“The projects that are so easy to get into and have guaranteed returns should be done by the private sector. If it can be done commercially then all development partners should avoid financing it. We can ask governments not to take the easy route and not accept the loans for projects that can be funded by the private sector,” he said.
Where projects cannot be done commercially, he said that focus will be to see what can be done to reduce risks through ways such as policy reforms and what development institutions can do to help governments make those changes.
Dr Kim’s remarks came days after the announcement of a record $57 billion towards financing different projects in sub-Saharan Africa over the next three fiscal years.
The bulk of the financing – $45 billion – will come from the International Development Association (IDA), the World Bank Group’s fund for the poorest countries.
The financing for sub-Saharan Africa also will include an estimated $8 billion in private sector investments from the International Finance Corporation (IFC), a private sector arm of the World Bank Group, and $4 billion in financing from International Bank for Reconstruction and Development, its a non-concessional public sector arm.
Towards global goals of ending poverty and having shared prosperity, Kim advocated for approaches such as investing more in human capital through improved education systems as well as building resilience to economic shocks that have often stalled the economic growth.
Kim said countries should also have a sense of urgency in building human capital given the pace of automation of services which is expected to reduce the number of jobs available globally.
While in the country, Kim visited the drones facility in Muhanga District on Tuesday, ICT innovation centre, kLab, and Digital Fabrication Lab (FAB LAB) and Kigali Special Economic Zone, where he toured Africa Improved Foods.