Following the selection this week of Dartmouth College president and public health expert Jim Young Kim as World Bank president, Africa financial leaders are calling for more democracy and transparency in the global financial institution.
The selection of Kim, who had faced two other developing-world nominees, the African candidate and former Colombian Finance Minister Jose Antonio Ocampo, continued a seven-decade practice of installing an American citizen to lead the bank.
Nigeria's President Goodluck Jonathan said Tuesday that Okonjo-Iweala represented the voice of developing countries in a campaign for the reform of the World Bank. She was nominated in a rare show of unity of sub-Saharan Africa's three major rival powers, South Africa, Nigeria and Angola.
Okonjo-Iweala is not widely popular in Nigeria, mainly because of her role in removing a fuel subsidy in January, which provided cheap fuel to the population but cost billions of dollars. At the time, critics saw her as forcing World Bank policies on Nigeria, and thousands protested the removal of what they viewed as the sole benefit from their country's corruption-riddled oil industry.
In response, she tweeted that "It is not fair when people say that this fuel subsidy policy is an Okonjo-Iweala and IMF/World Bank one. It is not. Neither is it about me." (The subsidy was later partially reinstated by Jonathan).
Many in Africa, however, viewed the World Bank's presidential decision as based not on merit but nationality and some said it called the bank's legitimacy into question.
"Many Nigerians are opposed to the policies of the World Bank and IMF, pushed on to developing countries as far back as 1986. Those sentiments remain," said analyst Otive Igbuzor of the African Center for Leadership, Strategy and Development, referring to a policy that has forced tough budget cuts on developing countries in order to qualify for loans.
Igbuzor said in a phone interview that without providing a greater role to emerging economies, the World Bank risked irrelevance -- and a threat that in future those economies could form their own development bank.
"I think the implication for the bank is that the need for the reform of the bank in line with democratic principles and equity should be the clear agenda for the new president. The bank could become irrelevant if it doesn't reform. If the bank doesn't reform there is a possibility that an alternative institution may develop.
"The emerging economies are growing very quickly and in 50 years time they'll be bigger than the developed economies."
Daniel Bradlow, a law professor and economic analyst for the American University and South Africa's Pretoria University, said, "America showed its contempt, in that it didn't really care.
"I think Africa can feel some sense of achievement in that Africa stood united behind Ngozi. It could show that there was an African candidate who was clearly the best candidate. It exposed the fact that this was not a process based on merit."
Bradlow said Europe and America will likely to cling to their dominance of global financial institutions in years to come, and Africa and other emerging economies (known as the BRICS, Brazil, Russia, India, China and South Africa) still face deep resistance to their calls for change.
"The basic governance structure of the bank has not changed. My instinct is that it will change very little for the next few years, short of a big shift of power in the world.
"South Africa and the BRICS need to think about, even though power is changing, what are the limitations of that shift? I think that will require reaching out to other countries and to global civil society," Bradlow said.
Okonjo-Iweala congratulated Kim, but called for a fairer, open selection process.
"With regard to the selection process, it is clear to me that we need to make it more open, transparent and merit-based," Okonjo-Iweala said in a statement. "We need to make sure that we do not contribute to a democratic deficit in global governance."
South African Finance Minister Pravin Gordhan told journalists Monday before the announcement was made that there was a need to "look beyond the verbiage of democracy and the claims to democratic process and ask whether in substantive terms the institution has met the democratic test."
Peter Chowla, of London based nonprofit the Bretton Woods Project, which has been campaigning for reform of global financial institutions, said there was a pressing need to reform the bank and its management.
The organization contends the bank has been pushing failed policies on poor countries for 30 years, with little success in reducing poverty.
"Africa and the developing world have been demanding changes in voting rights and management and management selection for 20 years. I think we are likely to see them continuing to push for reforms," Chowla said.
He also predicted the emergence of one or more development banks financed by emerging economies, that would provide competition to the World Bank giving small African countries various options as to whom they approached for development assistance.
Photo: Ngozi Okonjo-Iweala, finance minister of Nigeria, leaves World Bank headquarters in Washington, D.C. after interviewing for the position of president in early March. Credit: T.J. Kirkpatrick / Bloomberg