Arunma Oteh, Treasurer and Vice President, World Bank Group (Interview): The Africa Report
Money is needed – and it is no trifling sum. The funding gap for the Sustainable Development Goals (SDGs) – 17 global targets set by the United Nations with a deadline of 2030 – is estimated at $1.4trn. The ability of African countries to raise their shares of these sums is limited.
The continent’s frontline ‘cheap money’ institution, the African Development Bank (AfDB), lent $7.4bn in 2017, a record for the Bank. But that is a drop in the ocean of the continent’s needs. Meeting Africa’s demand for roads, railways, power stations, water and sanitation, schools, hospitals and other infrastructure requires spending of $120bn a year, according to the AfDB.
There is, however, money out there. This includes, “$26trn of assets under management that is invested in low or negative yielding securities,” says Arunma Oteh, treasurer and a vice-president of the World Bank. Oteh has championed a financial engineering approach to the funding gap: this means taking the World Bank’s concessional finance arm for the poorest countries – known as the International Development Association (IDA) – and using its funds as collateral to raise money on international markets.
The former regulator of Nigeria’s stock exchange is a no-nonsense advocate for bringing fresh capital to bear on the world’s problems. Wielding the cut-glass English accent of Nigeria’s elite, she unpacks the World Bank’s current opportunities. The basic equation is that the IDA is respected, and a growing class of investor wants more than just financial returns – so why not launch a bond that will go a little further in meeting the global funding gap for development? The result, the first paper issued by the IDA, was a $1.5bn benchmark bond launched in April of this year.
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