World Bank Chief Banga says lender 'wasting time' with too many rules

By Eric Martin

World Bank President Ajay Banga said some of the development lender’s work is bogged down with too many requirements, which slows progress and impacts its effectiveness at a time when he’s trying to raise capital and expand the bank’s mandate.
 

“We are wasting time on this stuff,” Banga said at an event Monday, referring to more than 1,100 rules that projects must clear to get funding from the bank’s International Development Association, which offers grants and loans to the poorest nations. He said that’s up from about 150 a couple of decades ago.

In addition to focusing the bank more on climate change and its consequences since taking over in June, Banga has often flagged what he sees as slowness and inefficiencies of the institution, which has about 16,000 staff.

While it’s important to have standards to ensure taxpayer money is used responsibly, the current level of bureaucracy slows down its work, he said. The focus on efficiency comes as Banga seeks to drum up support for bigger donations from its members and the private sector.

“We need to find some way to thread the needle,” the former Mastercard Inc. chief executive officer said Monday at an event at the Center for Global Development think tank in Washington.

Donors to the IDA, which started in 1960, provided a record $93 billion for the lending arm through fiscal year 2025. Banga has said he wants the next round to break that record. 

Banga cited other examples where bank processes can be tailored to a project’s risk, such as revising how the environmental impacts are assessed and reducing the number of stakeholders required to sign off on decisions. 

He also said he wants to better coordinate project approvals and administration issues across its other two main lending arms — the International Bank for Reconstruction and Development and the International Finance Corp., which works with the private sector.

“It’s stuff that shouldn’t be that hard to do,” Banga said.

On the subject of distressed debt among poorer countries, Banga said the Group of 20-backed Common Framework initiative is too slow, which he said is due to the the various interests involved, including official creditors such as China, as well as private investors.

Among debtor countries, the Western-aligned Paris Club of creditor nations now make up only 40 per cent of lending, down from 90 per cent two decades ago, as the role of China and private loans has increased, Banga said.