In early January, the IDB has informed Togo of its decision to withdraw from several financial agreements signed in 2016, a pull-out that was not politically motivated, contrary to what a few media outlets had reported, but rather, reveals the financial offhandedness of certain sovereigns benefiting from the multilateral development financing institution’s support. MARC ROUSSOT brings you the story.
Less than a month after Togo’s vote against a UN resolution calling on the US to withdraw its recognition of Jerusalem as the capital of Israel, the IDB renounced its support for three projects it had pledged financing for, a decision interpreted by several media outlets such as Ici Lome and L’Alternative as the IDB’s backlash over Togo’s geopolitical decision. However, albeit less sensational, the truth lies elsewhere.
In 2016, Togo and the IDB signed financing agreements for the development of two road schemes and an education project. For each project, the government had six months after the approval to finalize all the paperwork and six additional months to start the procurement process and assign a contractor. In total, the government had a whole year to launch its projects.
“Togo did not respect the timeline. To release the funds, the IDB needed certain documents, and these were sent by Togo only late in 2017, long after the agreed deadline. It has nothing to do with Togo’s vote on Jerusalem. Togo is not the only country in this situation. The IDB notified a few other sovereigns that it would not channel the financing agreed on, as [the] deadline had not been met,” a source at Togo’s Ministry of Finance told IFN.
The cancelation of projects in Togo, decided by the board of executive directors prior to the vote on Jerusalem, is the result of a general exercise that the IDB performs at the end of the financial year to make sure that its financial position remains strong and that it can sustain its ‘AAA’ rating, confirms Abdul-Hakim Elwaer, a spokesperson at the IDB.
“All the projects that have been canceled were facing unnecessary delays beyond the agreed deadlines thus becoming extended liabilities that the IDB could not maintain, as it was taking away resources that could be used in other projects. There are no political considerations whatsoever,” Abdul-Hakim hammers home.
Most of the 57 IDB member countries have seen the cancelation of one or several projects for the same reason as Togo. The list includes Niger, Mali, Tunisia, Tchad and Guinea, among others.
Relations between Togo and the IDB are fair, affirms the source at Togo’s Ministry of Finance. The IDB has even agreed on supporting a microfinancing project for women and youth in Togo. The signing of the agreement is expected in the next few weeks.