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Making Development Finance Work for Africa

Multiple, overlapping crises have exposed the outdated framework of multilateral development banks. A closer look at the challenges facing Nigeria demonstrates how MDBs can better support African countries as they work to reduce poverty and translate their immense potential into meaningful economic growth.

ABUJA – If the COVID-19 pandemic demonstrated our interdependence and hyper-connectedness, Russia’s war in Ukraine and its economic consequences have further underscored that no country or region can stand alone. We are all integrated – politically and by trade and investment linkages – into the global economy.

Given growing awareness of this, policymakers around the world are rethinking their approach to sustainable development and re-examining the role of multilateral development banks (MDBs). These institutions are of course still relevant. But whether they are fit for purpose in their current form is open to debate.

To determine how MDBs can best support developing countries, let us consider the difficulties facing Nigeria, where I served as minister of finance, budget, and national planning from 2019 until this year. During the pandemic, more of our citizens were pushed into poverty, and our economy faltered. The breakdown in global supply chains caused the price of crude oil, our largest export product, to crash, tipping Africa’s largest economy into recession. The economy rebounded after a series of reforms, but Russia’s war in Ukraine now confronts us with higher food, oil, and fertilizer prices.