ESTABLISHMENT OF AN AFRICAN DEVELOPMENT BANK
held at the Sudanese Parliament House, Khartoum, on Friday, 2 August 1903, at 9.25 a.m.
Chairman: Mr. Abdel Maged AHMED (Sudan).
CONTENTS:
Further Consideration of Draft Agreement Establishing an African Development Bank (E/CN.l4/FMAB/25, Annex II).
Consideration of Interim Arrangements for the Period between the Signing of the Agreement and its Coming into Force.
FURTHER CONSIDERATION OF DRAFT AGREEMENT ESTABLISHING AN AFRICAN DEVELOPMENT BANK (EjCN.14!FMABj25.
Annex II)
The CHAIRMAN invited the Conference to continue its discussion of the amendment to Article 35 (EjCN.14jFMABj30).
Mr. KONE (Mali) appealed to the representa-tive of the Ivory Coast to withdraw the amendment temporarily on the understanding that (since it was true that the economic and political aspects of the Bank could not be entirely divorced from one another), it would be reconsidered after the Bank had been operating for a few years.
Mr. BARKOUGNE (Niger) contended that the Bank, which the Heads of State Meeting at Addis Ababa had decided to establisb, was primarily a po]iticaJ institution and in no way comparable to the IBRD. The large subscribers to the Bank would derive at least as much advantage from it as smaJ(
ones. As the same relative effort was as ked of each country, it was difficult not to accept the principle of
"one country - one vote".
Mr. M'KHAITTRAT (Mauritania) tbought there was something to be said for both the "business"
and "politica]" vie';." of the Bank. Clearly, it was not intended to be a charitable institution. Some con-cessions had been made. But that one Governor would have 730 votes while another had 3,625 meant that in fact the Board would be composed of Governors and Sub-Governors and that the Bank would be dominated by a few big countries.Itshould be possible to eliminate such discrimination between African States and reconcile political equality with safeguards for the interests of the large contributors.
In any case, the Bank would be run mainly by technical personnel; the formal and political decisions would have to be taken by the Governors. The possibility of a suitable compromise had been in-dicated by the representative of Sierra Leone at the third meeting.
Mr. BITARlHO (Burundi) wondered whether it would be possible, as a compromise, to increase the proportion of fixed votes to share votes, for example by increasing the number of fixed votes to 700.
Mr. DIAWADOU BARRY (Guinea) pointed out that the suggestion would raise difficulties be-causc the figure 625 was the quotient of 20,000 sub-scriptions divided by 32 countries.
Mr. BITARIHO (Burundi) said that another method would be to have a total of 30,000 fixed votes and 10,000 proportional votes.
Mr. RALISON (Madagascar), noting that the representative of Mali and a number of others had declared themselves basically in favour of the prin-ciple of "one country _. one vote", failed to see why they felt it inadvisable to apply Ihat principle immediately. When the Governments of the
Casablanca Croup had discussed establishing a development, bank, they had accepted that principle.
Mr. ZANDOU (United Arab Republic) pointed out that in the Casablanca case it had been intended that all capital subscriptions should be equal. He endorsed the views of the Liberian representative.
Mr. Ben Salah AHMED (Tunisia) suggested that the statement by the Malian representative could be considered as an amendment to the amend-ment. If the Conference agreed, it could adopt that proposal, i.e. to maintain Article 35 as it stood but to provide for the question to be reconsidered at a later stage.
Mr. KONE (Mali) said he would prefer the representative of the Ivory Coast to agree to with-draw his amendment before he submitted his own proposal as an amendment.
Mr. MOCKEY (Ivory Coast) requested a short suspension of the meeting.
The meeting was suspended at 10.30 a.m. and resumed at 11.00 a.m.
Mr. KONE (Mali) submitted the following proposal, saying he hoped it would be acceptable to the representative of the Ivory Coast: "In the light of experience and three years at latest after the entry into force of the Agreement, the rule according to which each member State should have one vote shall be examined either by the Board of Governors or at a meeting of Heads of States." It would be understood that at the relevant meeting of the Board of Governors, the golden rule of one country-one vote would be observed. If the Board could not agree, the matter would go before the Heads of State.
Mr. MOCKEY (Ivory Coast) stressed that he had never contested the principle that those who made the greatest financial contribution were entitled to exercise control over what was done with their money. But it could not be overlooked that the Bank was more than a business concern; it was a political offspring of the Addis Ababa Charter. That was why an atmosphere of mutual confidence was so vital.
To allay his anxiety lest the political aspect of the Bank should beignored, he would like it to be speci-fied that any African State acceding to the Bank must first ratify the Charter of the Organization of African Unity. However, in response to the appeals of his colleagues, particularly that of the representa-tive of Mali, he was withdrawing his amendment.
In reply to a question from Chief OKOTIE-EBOH (Nigeria), Mr. KONE (Mali) confirmed that the starting date of the three-year period which he had in mind was the date on which the Bank started operations.
After a procedural discussion, the CHAIRMAN indicated that, the Ivory Coast amendment having been withdrawn, the Malian proposal was before the meeting.
Mr. SHERMAN (Liberia), supported by 74
-Mr. WALTER (Mauritius), Me. BOMANI (Tanga-nyika) Mr. KAMITATU (Congo (Leopoldville)) and Chief OKOTIE EBOH (Nigeria), suggested that the situation might best be dealt with by leaving the Article as it stood and passing a unanimous resolution in terms of the Malian proposal.
Mr. PEYTAVIN (Senegal), supported by Mr.
BARKOUGNE (Niger), objected that any pro-vision for amending the Agreement ought to be included in the Agreement itself.
Mr. GARDINER (Executive Secretary, ECA) pointed out that it would be technically feasible to leave Article 35 as it stood but to include an ad-ditional paragraph incorporating the Malian pro-posal in Article 60. He suggested the malter could be dealt with by the Drafting Committee.
It was so decided.
The CHAIRMAN asked the Conference to turn to the amendment to Article 37 tabled by the delegation of Niger (E/CN.l4/FMAB/31).
Mr. CARNEY (Sierra Leone) opposed the amendment. The Bank was not a charitable institu-tion which people could be expected to serve out of sheer goodwill. It would be competing for per-sonnel, in the world market as well as the African market, against other financial institutions. Hence the President of the Bank ought to have discretion as to what salaries should be paid to induce people to work for it; the Conference was not competent to dictate the Bank's salary policy.
He proposed an amendment to the amendment:
After the word "appoint", to replace the words
"fix their conditions... austerity" by the words
"with proper regard to suitable conditions of employ-ment".
Chief OKOTIE-EBOH (Nigeria) proposed an alternative amendment to the amendment: to re-place the words "austerity and release" by the word
"policy" .
Mr. WALTER (Mauritius) seconded the Nigerian amendment.
Mr. CARNEY (Sierra Leone) withdrew his amenflment in favour of the Nigerian wording.
Mr. BARKOUGNE (Niger) commenting that his main concern had been the discrepancy bet-ween the standards normally prevailing in African countries and the conditions of employment of in-ternational staff, said he would accept the Nigerian proposal on the understanding that the French word-ing would be "suivant les regles d'une saine gestion et de poUt/que financiere des hanques".
Mr. KONE (Mali) considered that the principle of austerity in salaries should only be applied to African officials, who ought to accept such policy in the cause of African unity. If the Bank needed foreign technicians from America or Europe, it would have to pay competitive rates for them.
Mr. KAMITATU (Congo (Leopoldville)) re-quested that the word "relel'er" be used instead of
"revoquer" in the French text.
The CHAIRMAN noted that the Conference accepted the amendment to Article 37 as amended by the Nigerian representative. The wording would be finalized by the Drafting Committee.
CONSIDERATION OF INTERIM ARRANGE-MENTS FOR THE PERIOD BETWEEN THE SIGNING OF THE AGREEMENT AND ITS COMING INTO FORCE.
Mr. DIAWADOU BARRY (Guinea) proposed the elimination of the Interim Arrangements. In the first place, there was a constitutiona I obstacle in that Guinea, like some other countries, could not earmark finance for an international institution until it had formally approved that institutioil by rat i-fication. It might therefore not be in a position to pay the contribution scheduled for payment thirty days from the date of signature. A related problem was that, if the Agreement and the Interim Arrange-ments were both accepted, the signatories would be required to pay the first two instalments (5 per cent and 35 per cent) to the Bank within six months, as well as 50 per cent of their assessment for the Interim Arrangements thirty days after signature and the remainder six months later; all of which constituted a heavy burden.
It was, furthermore, arguable whether an interim and therefore provisional body was legally capable of committing irrevocably by its decisions a body which had not yet been set up.
To replace the proposed Interim Arrangements he suggested that the Committee of Nine be renewed with its present membership and entrusted, with the assistance of the Executive Secretary and the experts, with the following tasks:
(i) To receive the instruments of ratification of thc Agreement. A resolution could be passed asking the States to ratify as soon as possible in ac-cordance with the procedure instituted by the Heads of States at Addis Ababa, i.c.. within two or three months.
(ii) With the help of the cxperts, to compile infor-mation and prepare studies for setting up the tcchnical organs of the Bank.
The small organization hc proposed might eventually hold its meetings at the place chosen as the location of the Bank.
If a heavy interim budget were avoided, it would he possible to keep to the schedule of instalments provided in the Agreement itself. It was to be hoped that the United Nations Special Fund conld still make a contribution so as to enable the organiza-tion he was advocating to funcorganiza-tion. The proposed procednre should accelerate the setting up of the Bank; if two years or so had to elapse before it was established, its functioning and its very existence might bc jeopardized.
The Drafting Committee could be asked It}
proposal or another committee m'ght be appointed for that purpose.
Mr. Ben Salah AHMED (Tunisia) supported the proposal. It would avoid the psychological draw-back of the very lengthy arrangements originally proposed. He hoped the Executive Secretary would be able\0 undertake this further task in conjunction with the Committee of Nine, especially as it really amounted to an extension of the current work.
Mr. GARDINER (Executive Secretary, ECA) thought there seemed to be some misunderstanding concerning the estimates drawn up for the Interim Arrangements. Naturally, if ratification were to take place within three months, only a small fraction of those estimates would apply. In that sense, there was certainly no commitment to an expenditure amounting to some total figure.
Another point to be clarified was that the US
$1 million offered by the Special Fund was intended to he a matching fund. In any case, expenditure would have to be incurred whether the Preparatory Meeting's proposal was accepted or not, because some form of arrangements would still be needed.
as the Guinean representative had recognized. Some of the functions to be performed between the signature of the Agreement and the setting up of the Bank were: contact with Governments, if necessary bring-ing pressure to bear for speedy ratification; admini-strative arrangements in cannexion with the location of the Bank and with starting its activities; prepara-tion of essential texts and documents.
He was anxious to dispel the impression that the interim body might irrevocably commit the Bank itself. From the very nature of the arrangements it was clear that whatever commitments were entered into would be either of "hort duration or provisional.
The Economic Commission for Africa had already offered to prepare studies and give as much assistance as was feasible without upsetting its programme of work. However, to do that it would have to be entrusted with the necessary funds to cover the interim period. Since they were members of the Commission, the Governments represented at the Conference would surely not permit it to abandon the work programme which they had ap-proved.
Mr. FARUQI (Observer for the United Nations Special Fund) pointed out that the assistance offered by the Special Fund was in making funds available where needed. Such money was of course refund-able. It had been felt that some unforeseeable con-tingencies might arise in the interim period. If the transitory arrangements could bring about the creation of the Bank as a working organization within a shorter period than had been envisaged, the Special Fund would be happy; there was no com-mitment. But in case that did not come about, the funds concerned were at the absolute diposal of the interim body.
Mr. ZANDOU (United Arab Republic) sup-ported the Guinean proposal. It was important to concentrate on the Agreement concerning the Bank itself and getting it ratified as soon as possible. Too much attention to interim arrangements might mean losing sight of the real thing.
It was decided to appoint a committee composed () the representatives of Cameroun, EtMopia. Ghana Guinea, Mali, Sudan, Tanganyika. Tunisia, and the United Arab Republic to consider the Guinean pro-posal.
The meeting rose at 1.30 p.m.
- 76
-SUMMARY RECORD OF THE SIXTH SESSION (CLOSED)