A bank originally set up to help countries of the former Soviet bloc is poised to extend its operations into sub-Saharan Africa in order to speed up progress in meeting ambitious development goals set by the United Nations.
Sir Suma Chakrabarti, the president of the London-based European Bank for Reconstruction and Development, said his organisation had the money and the expertise to stimulate the growth of strong private sectors in some of the world’s poorest countries.
Speaking to the Guardian in Washington, Chakrabarti expressed enthusiasm for expansion into sub-Saharan Africa if the member governments that own the bank gave the go-ahead.
“Our shareholders need to start a debate about whether they want us to add to our capacity”, he said. “We have increased our geographical reach – to Mongolia, then Turkey, then the Middle East and north Africa, then Greece and Cyprus.
“The biggest gap is sub-Saharan Africa. The biggest need there is private sector development which is what we do. If we get involved, we need to do so gradually and incrementally. Countries we work with must have a commitment to democracy and market economics.”
With the EBRD prevented from lending to Russia since the start of the Ukraine crisis in 2014, Chakrabarti said the EBRD had all the capital it needed and could increase its lending by €2.5-3bn a year.
The World Bank and the African Development Bank already operate in sub-Saharan Africa, but Chakrabarti said he did not envisage a turf war if the EBRD joined them.
“There is so much to do. The African Development Bank was the biggest cheerleader for us to extend into north Africa and has said it would welcome us with open arms because there is a need for a strong private sector.”
He said the EBRD’s business model was successful because it employed local staff, with only the mission heads non-nationals, adding that the UK government should be celebrating his bank as an example of the global Britain it wants to create after Brexit.
Along with the International Maritime Organisaton, the EBRD is one of only two multilateral bodies based in London. Chakrabarti said India would soon join China as a shareholder in the bank, which had a strong development policy focus and attracted talented people from around the world. It is successful and it is profitable
“We need to recognise the importance to the UK of this organisation. It is a good news story for Britain.”
Chakrabarti said the international community needed to do more if the UN’s 2030 sustainable development goals – 17 targets including eliminating poverty and providing universal quality education – were going to be met. “It is worrying that everyone has willed the objectives but not the means. Business as usual is not going to get us there.”
The World Bank announced on Saturday an agreement to increase its capital by $13bn following protracted talks with the US Treasury.
Chakrabarti said the agreement was good in itself, but added that it was also encouraging that the US was engaged with the multilateral system.
