Partnering with the New Development Bank

The document examines why traditional multilateral development banks struggle to meet the needs of middle-income countries, citing bureaucratic loan processes, rigid procurement rules, and stringent safeguards. Using the African Development Bank (AfDB) as a case study and analyzing experiences in Nigeria and Botswana, it argues that MICs are increasingly turning to private finance, bilateral donors like China, and domestic markets. It recommends that the NDB adopt a leaner operational model, utilize 'use of country systems' (UCS) for procurement, focus on 'green' sustainable infrastructure, and improve gender representation in governance to avoid the pitfalls of established MDBs.

• Traditional multilateral development banks (MDBs) are seeing a decline in borrowing from middle-income countries (MICs) due to excessive bureaucracy, strict loan conditions, and a failure to adapt to a changing global environment.
• The loan approval process at the African Development Bank (AfDB) is described as overly bureaucratic and inflexible, involving over 20 formal review steps and potentially taking between six months and over three years to complete.
• MDBs often impose stringent procurement requirements that conflict with national policies, creating additional layers of control that delay project implementation; the 'use of country systems' (UCS) approach is proposed as a solution to increase speed and sustainability.
• While environmental and social safeguards are increasingly necessary and accepted, a shortage of local experts in countries like Nigeria to conduct these assessments makes loan procurement from MDBs more prolonged and cumbersome.
• Private sector investment in sub-Saharan Africa has historically been heavily concentrated in the information and communications technology (ICT) sector, though interest is shifting toward energy generation.
• China has become a significant bilateral infrastructure financier in Africa, often focusing on road and rail projects and providing technical assistance, although its reporting processes are less transparent than OECD donors.
• The New Development Bank (NDB) lacks gender diversity in its top leadership, with no women on its board of governors, board of directors, or in its top five senior management positions.
• The AfDB maintains a competitive advantage over private finance by offering preferential interest rates, longer maturities, and grace periods, which are highly valued by countries like Botswana.
• The NDB is encouraged to carve out a specialized niche in 'green' and sustainable infrastructure, including renewable energy and CO2-reducing transport, to differentiate itself from other MDBs.
• To improve efficiency, the NDB is advised to implement simplified procedures for smaller loans and explore 'blended' currency loans to mitigate the risks associated with currency fluctuations for borrowers.

APA

Prinsloo, C. (2016). Partnering with the New Development Bank. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2016/11/GEG-africa-DP-nov2016-prinsloo-FINAL-WEB.pdf

Chicago

Prinsloo, Cyril. Partnering with the New Development Bank. South African Institute of International Affairs, 2016. https://saiia.org.za/wp-content/uploads/2016/11/GEG-africa-DP-nov2016-prinsloo-FINAL-WEB.pdf.

Wikipedia

{{cite report |last1=Prinsloo |first1=Cyril |title=Partnering with the New Development Bank |publisher=South African Institute of International Affairs |date=November 2016 |url=https://saiia.org.za/wp-content/uploads/2016/11/GEG-africa-DP-nov2016-prinsloo-FINAL-WEB.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{prinsloo2016partnering, author = {Prinsloo, Cyril}, title = {{Partnering with the New Development Bank}}, institution = {South African Institute of International Affairs}, year = {2016}, month = nov, url = {https://saiia.org.za/wp-content/uploads/2016/11/GEG-africa-DP-nov2016-prinsloo-FINAL-WEB.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }