The World Bank Group president, Jim Yong Kim, on Monday announced he would be stepping down from his position effective February 1.
Mr Kim’s announcement is coming more than three years ahead of the end of his tenure in 2022.
“It has been a great honour to serve as President of this remarkable institution, full of passionate individuals dedicated to the mission of ending extreme poverty in our lifetime,” Kim said his statement on Monday.
In his place, the World Bank Group CEO, Kristalina Georgieva, will assume the role of interim president effective February 1. Mr Kim said the work of the World Bank Group is more important now than ever as the aspirations of the poor rise all over the world.
He said problems like climate change, pandemics, famine and refugees continue to grow in both their scale and complexity.
“Serving as President and helping position the institution squarely in the middle of all these challenges has been a great privilege,” Kim said.
As World Bank President since July 2012, the outgoing World Bank Group head noted infrastructure finance as one of the greatest needs in the developing world. He said he led the Group to mobilize its financing by working with private sector partners to build sustainable, climate-smart infrastructure in developing nations.
Immediately after his exit, Mr Kim said he would join a firm focussing on increasing infrastructure investments in developing countries. He said details of his new position would be made public later.
Under his Presidency of the Group, Mr Kim said the World Bank set the target of ending extreme poverty by 2030 and to grow shared prosperity, by focusing on the 40 percent of the population in developing countries.
Besides, he said the Bank enjoyed strong support from shareholders to better position it to respond to the development needs, particularly its Fund for the poorest, the International Development Agency (IDA), which achieved record replenishments that enabled it increase its work in areas suffering from fragility, conflict, and violence.
Sluggish expansion in Nigeria, Angola and South Africa – Africa’s three largest economies – is expected to dampen the growth prospects for Sub-Saharan Africa to 2.7 percent in 2018, according to the World Bank which has also warned of increasing public debt in the region.
The World Bank says it now expects Sub-Saharan Africa economies to grow by 2.7 percent in 2018, lower than the 3.1 percent it had projected for the subregion earlier in April.
The World Bank notes that Sub-Saharan African economies are still recovering from the s2015-2916 slowdown, but growth is still slower than expected.
“The slower pace of the recovery in Sub-Saharan Africa (0.4 percentage points lower than the April forecast) is explained by the sluggish expansion in the region’s three largest economies, Nigeria, Angola, and South Africa,” the World Bank said in the Africa Pulse published on Wednesday ahead of the Annual meetings of the International Monetary Fund (IMF) and World Bank scheduled to begin in Bali, Indonesia on Monday, October 8.
The estimated 2.7 percent average growth rate in the region is however, a slight increase from 2.3 percent recorded in 2017.
“The region’s economic recovery is in progress but at a slower pace than expected,” said Albert Zeufack, World Bank Chief Economist for Africa.
“To accelerate and sustain an inclusive growth momentum, policy makers must continue to focus on investments that foster human capital, reduce resource misallocation and boost productivity. Policymakers in the region must equip themselves to manage new risks arising from changes in the composition of capital flows and debt.”
According to the World Bank, Slow growth is partially a reflection of a less favorable external environment for the region.
Global trade and industrial activity lost momentum, as metals and agricultural prices fell due to concerns about trade tariffs and weakening demand prospects. While oil prices are likely to be on an upward trend into 2019, metals prices may remain subdued amid muted demand, particularly in China.
Also, Financial market pressures have intensified in some emerging markets and concern about their dollar-denominated debt has risen amid a stronger US dollar.
Besides, Lower oil production in Angola and Nigeria offset higher oil prices, and in South Africa, weak household consumption growth was compounded by a contraction in agriculture. Growth in the region – excluding Angola, Nigeria and South Africa – was steady.
The Bank further notes that Several oil exporters in Central Africa were helped by higher oil prices and an increase in oil production.
Economic activity remained solid in the fast-growing non-resource-rich countries, such as Côte d’Ivoire, Kenya, and Rwanda, supported by agricultural production and services on the production side, and household consumption and public investment on the demand side.
“Public debt remained high and continues to rise in some countries,” the World Bank further notes – amid heightened concerns that about 40 percent of low income countries in Sub-Saharan Africa region are already in debt distress or in high risk of debt crisis.
The IMF for instance worried that for low income countries, including Nigeria, governments have embarked on excessive borrowing to fund development, especially as incomes dwindled for commodity prices- and is now strongly advising on an aggressive tax mobilisation.
“Vulnerability to weaker currencies and rising interest rates associated with the changing composition of debt may put the region’s public debt sustainability further at risk,” the World Bank says in the latest report.
Other domestic risks include fiscal slippage, conflicts, and weather shocks. Consequently, policies and reforms are needed that can strengthen resilience to risks and raise medium-term potential growth.
This issue of Africa’s Pulse highlights sub-Saharan Africa’s lower labor productivity and potentials for improvement
“Reforms should include policies which encourage investments in non-resource sectors, generate jobs and improve the efficiency of firms and workers,” said Cesar Calderon, Lead Economist and Lead author of the report.