Created to finance development, the multilateral banks today lend well below what the world expects of them. President Macky Sall has made their reform one of the priorities of his candidacy for UN Secretary-General.
Under-used capital. A review commissioned by the G20 in 2022 established that these banks could lend hundreds of billions of dollars more from their existing capital while keeping the rating that secures them low rates. Excessive caution thus leaves useful projects unfunded.
Needs that far exceed supply. Developing countries need trillions of dollars a year for development and climate, while these banks' loans cover only a fraction. The gap is filled in part by expensive debt, the very debt that later smothers budgets.
Reform that preserves soundness. Making better use of balance sheets, mobilising more guaranteed capital and steering loans toward climate and infrastructure raise their lending capacity while protecting their soundness. The reform rests first on a better use of the capital already paid in, before any new contribution from states.
Bringing the shareholders together. Decisions at these banks belong to their shareholders. The Secretary-General can bring them together around a reform that makes these institutions lend to the measure of the needs they exist to serve, starting from the findings of the G20 review.
The reform and the President's experience. To carry this work forward, President Macky Sall draws on twelve years as head of state and on the chairmanship of the African Union in 2022. The same experience explains the form of the vision statement filed with the United Nations, where the proposals (development conceived together with peace and security, a renewed multilateralism, a better-governed Organization) are written as obligations.
Africa at its heart, the world in its sights.
The G20's 2022 review of the capital adequacy of the multilateral development banks is public. Read all public positions at www.mackysall.net