May 27, 2010—On May 14, World Bank Managing Director Ngozi Okonjo-Iweala shared a riddle and a “big idea” with fellow Harvard alumni.
“What trillion dollar economy has grown faster than Brazil and India between 2000 and 2010 … and is projected by the IMF to grow faster than Brazil between 2010 and 2015?
“The answer may surprise you: It is sub-Saharan Africa!”
The “big idea” the former finance and foreign minister for Nigeria wanted to impart was that sub-Saharan Africa is on the verge of joining the ranks of the BRICS – the rising powers of Brazil, Russia, India and China, whose wealth and clout have increased dramatically in the last decade.
Africa can serve, she said, as a new source of global demand; its population may soon rival that of China and India. It should be a destination for investment, “not just aid.”
In the space of a few years, the Group of Seven (G7) major economies expanded to the G8, then the G20 with the inclusion of the BRICs and other newly influential economies. The developing world’s share of global gross domestic product (GDP) in purchasing power parity terms increased from 33.7% in 1980 to 43.4% in 2010.
This growth has translated into more voting power for developing and transition economies at the World Bank. The Bank’s 186 shareholder countries agreed at the Spring Meetings in April to increase developing countries’ share of the votes by 3.13% to give them 47% of the votes.
Like others, World Bank Group President Robert B. Zoellick has made clear that he wants to see this go to 50% over time. However, that — as with the earlier reforms — is a decision for shareholders – the countries who own the Bank.
The change will make China the third largest shareholder at the Bank. Turkey, Mexico, Brazil and India will also see major increases in their voting shares, reflecting their new position in the world economy. Several poorer countries including Vietnam, El Salvador, Lebanon and Cambodia saw their voting power increase by 50%.
Sub-Saharan Africa’s share went from 5.55% to 5.86% in April. Most African nations, including Ethiopia, Liberia, Mali and Uganda, will benefit from voting share increases.
But more significantly, sub-Saharan Africa gained a new seat on the World Bank’s Board of Executive Directors, bringing the number of directors on the Board to 25.
“As the Bank’s Board generally operates by consensus, rather than votes, having another seat at the table—literally—will ensure that the voice and concerns of these countries are heard more loudly, and more clearly,” said World Bank Director Carlos Alberto Braga.
Africans Among Senior Bank Staff
The World Bank itself looks like the world it serves, with staff from 167 countries. Nearly two-thirds come from developing and transition countries. The World Bank has also seen a significant shift over the past three years in developing country representation at the senior-most levels.
Okonjo-Iweala, former finance minister of Nigeria, is among that group. As a managing director, she is one of the World Bank’s most influential people.
"Other Africans in senior-most positions include Leonard McCarthy, a South African corruption fighter and Vice President of the World Bank’s anti-corruption investigative arm, and Obiageli Ezekwesili, Nigeria’s former Minister of Education, now Vice President for Africa.
All were powerful reformers in their own countries. They are now bringing their internationally recognized expertise to the benefit of the broader global community. The group will soon be joined by newly appointed Managing Director Sri Mulyani Indrawati, former finance minister of Indonesia."
“It’s high time Africa saw and presented itself as the fifth BRIC, an attractive destination for investment, not just aid,” Okonjo-Iweala said in her Harvard speech.
“This is realistic and within reach. As Nelson Mandela said, ‘It always seems impossible until it’s done.”
Indeed, as countries recover from the global downturn, investment is returning to Africa—and much of it is coming from the BRICs. Sub-Saharan Africa could grow by an average of over 6% to 2015, . Zoellick said in a speech last month at the Woodrow Wilson Center for International Scholars.
“This is not about charity,” said Okonjo-Iweala. “Businesses are looking for new markets in which to invest and Africa is ripe for consideration.”