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Donald Kaberuka, the President of the African Development Bank and the leading voice for forward-leaning economic policy on the continent, has come out publicly in favor of paying some portion of natural resource windfalls as a direct dividend to citizens. We’re pretty excited about this policy idea at CGD, and have been thinking through some of the pros, cons, and practicalities of what we call Oil-to-Cash. Watch this space for our Oil-to-Cash book later in 2014.
In the meantime, we’re talking quietly with interested parties, including a few governments that are keen to learn more about the idea and how it might work. To help us get over some initial skepticism, I’m thrilled to gain a high-level endorsement from someone of Kaberuka’s stature. At the Mo Ibrahim Foundation forum in Addis Ababa in November, he said:
Now, this issue of where is the dollar in the pocket of the African people is fundamental for the leaders to address. It is the biggest elephant in the room. …Every single country has to think about what to do…Those who have oil, please consider—I know it's controversial—consider transferring some of that money as direct transfers to citizens. Controversial, but it should be considered. It's much better than these huge subsidies which are undermining treasuries and creating inequalities. A bit of that money—10%, 20%—direct to the people.
CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.
The African Development Bank recently turned 50. In that time it's made more than 4,000 grants and loans, totaling more than $71 billion. So what might its next half-century look like? Bank President Dr. Akinwumi Adesina joins me on this week's podcast to share his vision for Africa's future.
The African Development Bank is widely praised these days as one of the premier financial institutions in Africa. The past decade saw it place much greater emphasis on infrastructure financing, a change brought about in part by the instincts of its former president Donald Kaberuka. In this week's podcast, Kaberuka discusses how the AfDB’s success came about.