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Dáil Éireann debate -
Tuesday, 13 Nov 2018

Vol. 974 No. 7

African Development (Bank and Fund) Bill 2018: Second Stage

I move: "That the Bill be now read a Second Time".

The African Development (Bank and Fund) Bill, if approved by the Oireachtas, will facilitate Ireland’s future membership of the African Development Bank and the African Development Fund, the key entities of the African Development Bank Group, a multilateral development finance institution focused on contributing to economic and social development in the African region. The bank was founded in 1963 and the fund established in 1972 with membership consisting of 54 African states and 26 non-African states. The group’s mission is to help reduce poverty, improve living conditions and mobilise resources for the continent’s economic and social development.

To achieve this, the bank group mobilises and allocates resources for investment in its regional member countries and provides policy advice and technical assistance to support development efforts. This Bill will facilitate the approval of the agreement establishing the African Development Bank and the agreement establishing the African Development Fund and facilitate payments to be made to the bank and the fund, respectively.

Following the approval of the Government in November 2017, the Department of Finance has been engaging with the bank secretariat regarding Ireland's potential membership. Formal notification of Ireland's interest in participating in the fund and being admitted as a member of the bank was sent to the current president of the bank, Mr. Adesina, in February of this year. If Ireland is to complete its membership of the bank and the fund, we are required to consent to be bound by the international agreements establishing the bank and the fund. Membership shall oblige Ireland to contribute to both the bank and the fund. As Deputies will be aware, Article 29.5.2° of the Constitution provides that "the State shall not be bound by any international agreement involving a charge upon public funds unless the terms of the agreement shall have been approved by Dáil Éireann". The enactment of the Bill before the House would confirm such approval. Similar requirements applied when Ireland joined other international financial institutions such as the World Bank and, most recently, the Asian Infrastructure Investment Bank last year.

The rationale for Ireland's membership of the bank and the fund is primarily based on the bank's alignment with Ireland's development priorities, as well as our trade relations with the wider African economy. In particular, the bank’s emphasis on climate change, agriculture and nutrition, fragile states and jobs and economic development align closely with four of the six priority areas for action identified in Ireland's current international development policy. Historically, Ireland has had a long and positive relationship with Africa. Strong links were built through the development work of missionaries and aid workers and the effectiveness of our aid programme. Our reputation has been enhanced by the positive contribution of our peacekeepers, diplomats and business people. Our decision to join the bank and the fund complements our existing development relationship and is consistent with the priorities set out in the Global Ireland 2025 initiative, which was launched recently. I refer, for example, to our ambition to double the scope and impact of Ireland's global footprint across the next seven years. This initiative relates specifically to the objective of extending our influence in Asia and Africa.

As Deputies will be aware, Ireland is in the process of developing a new international development policy to take account of the significantly evolving international development context. In light of the increasing interconnectedness and scale of the international agenda, the co-ordination of efforts and the combining of resources will be increasingly important. Our partnership with multilateral institutions like the African Development Bank Group will be a key part of our approach. Ireland's membership of the bank and the fund is consistent with our commitment to the UN 2030 agenda for sustainable development and is reflective of our whole-of-Government approach to implementing the sustainable development goals. While the overarching rationale for our membership of the bank and the fund is based on values, our membership will also create new opportunities for Irish business. When we join the bank and the fund, our enterprises will be able to tender for the delivery of services or products for bank and fund projects which were not previously available to them. While the return from such access is difficult to quantify given the size of the operations of the bank and the fund in predominantly emerging economies, the potential for such new markets is timely and welcome.

The operations of the African Development Bank Group are underpinned by its corporate strategy. The African Development Bank's strategy for 2013 to 2022 is firmly rooted in a deep understanding of the process of economic transformation which Africa has embarked on in recent decades. It focuses on two objectives: improving the quality of Africa's growth and facilitating inclusive growth and the transition to green growth. The delivery of this work is to be achieved through five channels: infrastructure development, regional economic integration, private sector development, governance and accountability, and skills and technology. The authorised capital stock of the bank is approximately €79 billion, with approximately €6 billion of paid-in capital. In addition to subscriptions from member countries, the African Development Bank, like other multilateral development banks, raises capital on international markets at competitive rates by maintaining its AAA rating.

The African Development Group has 80 member countries, comprising 54 regional member countries and 26 non-regional member countries. Most of the countries in the latter group are in Europe, America and Asia. Among the European countries are Austria, Belgium, Denmark, Finland, France, Germany, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden and the United Kingdom. Non-regional member countries account for approximately 2.65 million of the total shares within the bank, representing 40.9% of the total shares and 40.9% of the total voting power. Of the non-regional countries, the US is the largest shareholder, occupying 6.6% of the total voting power. Based on the terms offered by the bank, it is intended that Ireland will acquire 53,620 shares, which is equivalent to 0.799% of the bank's total shareholding. This is in line with the shareholdings held by Belgium and the Netherlands, which hold 0.65% and 0.8% of the total shareholding, respectively. Each member country at the bank is represented at the bank's board of governors, which is the bank’s highest decision-making body. As part of a system that mirrors the position at each of the other international financial institutions of which Ireland is already a member, the Minister for Finance would be the governor for Ireland at the bank. The Department of Finance would manage Ireland's shareholding and representation at the bank, which replicates the position at all other international financial institutions, including the World Bank, the Asian Development Bank and the Asian Infrastructure Investment Bank.

The board of governors meets formally once a year for the bank's annual meeting. This board is responsible for electing the president of the bank, who is elected for a five-year term which can be renewed once. The current president is Mr. Akinwumi Adesina, who is a former Minister of Agriculture and Rural Development in Nigeria. He was elected as the eighth president of the bank in May 2015. The bank's board of directors, which is responsible for the bank's general operations, comprises 20 members who are neither governors nor alternate governors. Thirteen members are elected by the governors of regional countries and seven members are elected by the governors of non-regional member countries. Directors are elected for terms of five years which can be renewed once. The non-regional representation at board level is broken up into seven constituencies, four of which are led by EU member countries. Negotiations regarding the constituency which Ireland will join following membership are ongoing.

The operations of the African Development Bank Group are wide-ranging. The bank finances projects and programmes in areas like agriculture, health, education, public utilities, transport and telecommunications and the private sector. The bank also finances non-project operations, including structural adjustment loans, policy-based reforms and various forms of technical assistance. In 2017, total disbursements for the bank group peaked at approximately €6.6 billion, with project approvals amounting to approximately €7.5 billion across 249 operations. With regard to performance, the success of the bank group in delivering results for Africa has been recognised by the Multilateral Organization Performance Assessment Network, which is a network of like-minded donor countries that monitors the performance of multilateral development organisations and of which Ireland is a member. A recent assessment from the network, which was conducted in 2016, concluded that "the Bank is a robust and resilient organisation that, while operating in a particularly difficult environment, is able to continually adjust and improve to meet the changing conditions". It is of particular note that the assessment highlighted that the bank is particularly strong in the area of safeguards and standards, which facilitates the delivery of social and environmental standards, as well as in the area of screening projects against gender and climate change criteria. While the bank is an independent institution, it has a close working relationship with other multilateral development institutions such as the World Bank, specifically in the area of co-financing. In 2017, co-financing investments from partners such as the World Bank and the European Investment Bank generated approximately €9 billion.

Subject to the enactment of this Bill and the completion of our application for membership, Ireland will acquire 53,620 shares, which is equivalent to 0.799% of the bank's total shareholding.

In capital terms, this equates to a capital allocation in the order of €630 million, of which approximately €37.8 million represents paid-in capital, with the remainder of the allocation, €592.2 million, comprising callable capital. In general, callable capital represents the capital which a member country would be liable for if the institution encountered acute financial distress, while paid-in capital is the amount which a member contributes under normal circumstances. Based on Ireland's membership of existing international financial institutions, the probability of the callable capital being called upon is negligible. Therefore, in practice, our proposed shareholding equates to a subscription of approximately €37.8 million, payable over eight years at €4.7 million annually. With regard to our participation in the fund which is a prerequisite to facilitate our membership of the bank as a non-regional member country, a subscription of approximately €62 million will be required, with payments to be encashed in up to eight annual instalments. This is in line with our pledges to similar funds at the World Bank and the International Development Association.

Combined, the expected cost of Ireland's membership of the bank and fund would be approximately €99.8 million, payable over eight years at approximately €12.4 million per annum, depending on prevailing exchange rates. As is the case with our membership of other international financial institutions, Ireland's contributions to the bank and the fund would be sourced from the central fund, with payments to be provided for in the legislation. Furthermore, in the context of our continued efforts to achieve the UN target of 0.7% of gross national product, GNP, for overseas development assistance, ODA, Ireland's contributions to the bank and fund provide a further channel to effectively deliver increased levels of ODA. Moreover, the consistent level of payments over an eight year period would avoid perceptions of volatility or periodic reductions in Ireland's annual ODA contribution.

I now turn to the specific provisions of the six sections of the Bill. Section 1 deals with the Short Title, section 2 sets out the definitions used and section 3 provides for the approval of the agreement establishing the bank, thereby enabling the State to be party to the agreement. The agreement establishing the bank is attached as a Schedule. Section 4 makes provision for payments and receipts under the terms of the agreement establishing the bank. Section 5 provides for the approval of the agreement establishing the fund, thereby enabling the State to be party to the agreement. The agreement establishing the fund is attached as a Schedule. Section 6 makes provision for payments and receipts under the terms of the agreement establishing the fund.

I also would like to bring to the attention of Deputies that, subject to Government approval, a number of amendments may be introduced on Committee Stage, and, of course, any suggestions put forward by Deputies will also be considered by the Minister. I strongly recommend Ireland's membership of the bank and fund. The bank and fund play a significantly important role in driving economic and social development in Africa, and hence our membership would strengthen our existing development relationship in the region. Additionally, our membership would be consistent with the priorities set out in the recently launched Global Ireland 2025 initiative, notably the ambition to double the scope and impact of Ireland's global footprint over the next seven years, and with regard to the objective of extending our influence in Africa. In that context Ireland's participation in the bank provides an opportunity to extend our reach and impact in terms of trade, in particular through enhancing opportunities for Irish companies to secure procurements. The membership of the bank and fund would also provide a further channel to effectively deliver increased levels of ODA. I commend the Bill to the House.

This is a very important Bill. We support the Government's decision that Ireland become a member of the bank and the fund. This is a €100 million commitment over eight years, split between capital, called-in capital to the bank and the contribution to the development fund, amounting to €12.4 million per annum. This is much more than a monetary commitment. It is important that Ireland participate actively in various multilateral institutions particularly in the area of international development. We are already a member of several international development banks, including the International Monetary Fund, IMF, the World Bank, the European Bank for Reconstruction and Development, EBRD, the European Investment Bank, EIB, the Council of Europe Development Bank, the Asian Development Bank and, most recently, through the legislation passed in this House, the Asian Infrastructure Investment Bank. The decision to become a member of the African Development Bank and fund is in line with those commitments.

It is an opportune time to acknowledge the incredible work of many Irish missionaries in Africa down the years and which continues to this day. The selfless dedication and work of many members of different religious orders from Ireland over many years in Africa has been quite astounding. It is important to acknowledge that and express our thanks for that work.

The fact the African Development Bank emphasises issues such as climate change, agriculture and nutrition, fragile states, economic development and job creation makes it worthy of support. Our shareholding will be modest, coming in at just under 0.8% of the overall share profile of the bank. We will be one of a growing number of European countries which will be members of the bank and fund. It is important that the objectives of the bank and the fund are consistent with the sustainable development goals we have signed up to through various international commitments. It is important that Ireland's voice and that of the European Union are heard positively ensuring that the sustainable development agenda is to the fore when the board of directors of the bank makes decisions on where to invest funds and what types of project to invest in.

The terms of the Bill are straightforward. We will participate fully on Committee Stage in the analysis of the Bill to make sure it achieves the objectives as set out. There is a trade dimension to Ireland's business relationship with Africa. It is a growing relationship as Irish businesses look to diversify their presence in different markets, not least against the backdrop of Brexit, which remains uncertain, although we welcome reports of an agreed text between the EU and the UK negotiating teams in recent hours. There are, however, several hurdles to be crossed before there is a workable agreement that avoids the type of disruption we do not want to see affecting the Irish, UK and European economies.

In 2017, according to information provided by the Oireachtas Library and Research Service, the total value of Irish exports to Africa was €1.42 billion, with imports to Ireland worth €601.3 million. The main export markets in Africa for Ireland are, first, Nigeria, worth €280 million, second, South Africa, worth €243 million, and then Egypt, Morocco and Algeria.

There will be further opportunities. Reputationally, Ireland's membership of and participation in this bank and the African Development Fund will enhance the opportunities available to Irish firms to develop trade links further in the period ahead. That is very welcome.

The Minister of State is saying that, in respect of additional calls of capital that may be required, the prospect of the estimated €600 million ever being called in is negligible. He used the term "negligible". It is important, of course, that we assess properly the likelihood of this and make sure we are protected by way of our Exchequer contribution. This bank will operate very much in a similar way to the other international development banks to which Ireland is currently party. Our Minister will be a governor of the bank and will attend the AGM once a year. Ireland will be participating, presumably on a rotational basis, as part of a constituency of non-African member states to share the director role. As a result, there will at some point be an Irish director for three years, renewable for one term. I am sure the Government will seek to ensure we have representation that is proportionate to the contribution and commitment we are making to this initiative.

The contribution we are making is reckonable in terms of Ireland's ODA commitments. There is an arguable case in either direction on that front because it is not ODA in the traditional sense, but I acknowledge the work of this bank can contribute very significantly to economic development within Africa. This, of course, is a goal of the Government. The definition of ODA is evolving. We have to continue to examine ways of expanding our influence in favour of the type of model we believe works and will work in Africa, such that countries there can continue to explore opportunities to develop their economies and build trade links with other countries, taking account of the vast size of the continent and its diversity along so many metrics.

I will not elaborate beyond that. The Fianna Fáil Party supports this legislation. It is a demonstration of Ireland's commitment to participating in organisations internationally that focus on development, particularly sustainable development. We need to ensure that agenda is pursued in the operational decisions made by the bank. We are making a modest financial commitment up-front but it is an important one. It will enhance Ireland's reputation and its presence on the continent of Africa. It will open doors and create opportunities for further business and trade links to be developed, which is in the common interest of Africa, Ireland and the wider European Union.

Ba mhaith liom fáilte a chur roimh an mBille seo. Cosúil le Banc Infheistíochta Bonneagair na hÁise, a phléigh muid ar na mallaibh, tá sé tábhachtach go bhfuil ár bpáirt á ghlacadh againn i mBanc Forbraíochta na hAfraice. Is ceart an rud é go bhfuil an tír seo mar pháirt de na bainc forbartha seo agus ag cur le forbairt an domhain ar an iomlán. Níl dabht ar bith, agus muid ag teacht amach as amanna crua, go bhfuil sé sin níos tábhachtaí fós. Caithfimid díriú i gcónaí ar réigiúin an domhain nach bhfuil chomh láidir ó thaobh cúrsaí eacnamaíochta de is atá an tír seo. Ba cheart dúinn a chinntiú go bhfuilimid ag idirbheartaíocht leis na tíortha eile sa domhan ar an bhunús ceart. Níl dabht ar bith ach gur féidir leis na bainc fhorbartha seo ról lárnach a imirt agus iad ag cur airgid ar fáil le tograí infreastruchtúrtha tábhachtachta a chur i bhfeidhm.

I welcome this Bill. It is right and proper that we participate in development banks that make a contribution to the development of the entire world. As we know, Africa is a continent that is desperately short of key infrastructure, such as roads, rail networks and power plants. It is important that any efforts to tackle this infrastructural gap be African led and managed and part of a sustainable development plan.

ODA was once widely viewed as humanitarian assistance or a simple cash transfer. It is important to note that for what European countries give out in ODA, they take back multiples from African countries by means of unfair trade systems, the dumping of goods and, in particular, tax-avoidance schemes. Throughout Europe's brutal colonial occupation of most of the African continent, the latter was robbed of its natural resources, minerals and people. Some of the structures that were in place at the time remain in place today. We must bear that in mind before congratulating ourselves too much today in taking the decision to join this bank. While the AIIB was a new bank, driven by China, the African Development Fund and African Development Bank are long established and African led. Ireland is late in the day joining up as a member but it is better late than never. Unlike the case of the AIIB, there is no disadvantage to not being a founding member.

While in the grand scheme of things Ireland's contribution is small, both from the perspective of our budget and the budget of the bank, it is nevertheless €62 million or thereabouts, to be encashed in eight annual instalments and amounting to approximately €8 million per annum, for participation in the fund. There is a paid-in contribution in the region of €37.8 million for membership of the bank, which is also payable over eight years and amounts to €4.7 million annually. The first instalment is to be paid when the Oireachtas passes this Bill. This Bill therefore deserves our full attention and proper scrutiny. This means insisting that provision is made for accountability in order that the Oireachtas will not simply be writing a blank cheque. After all, I understand the maximum callable capital under the agreement would amount to just less than €600 million in Ireland's case. I fully accept that this is highly unlikely to ever be called because it never has been. It is important, however, to err on the side of caution. With that in mind, I will consider for Committee Stage amendments to ensure accountability and transparency will be central to the legislation.

There is no provision in the Bill stipulating that the annual report of the fund or bank be laid before the Houses of the Oireachtas. This is just a small example. I note that any moneys, including amendments, must be approved by the Dáil and not just the Minister for Finance. This is welcome. It has not always been the case, and that is why I make the point.

Regarding the Finance (Certain European Union and lntergovernmental Obligations) Act, which was originally entitled the Single Resolution Board (Loan Facility Agreement) Bill 2016, Sinn Féin made the point, accepted through an amendment, that when we sign off on these international agreements it is not good enough to have the Dáil sign off once and then have changes to what we agreed without further approval. That is not in this legislation, which is to be welcomed. At first glance, the legislation seems tighter but I will examine it and propose further amendments, if necessary.

The other major issue for me is how we account for the money. This was touched upon in terms of our ODA. The Minister told my colleague Deputy Crowe that the OECD Development Assistance Committee has decreed that 85% of contributions to the AIIB are eligible to be recorded as ODA. Could the Minister of State clarify what percentage of the African Development Bank payment could be counted towards our ODA target? I hope the moneys will go towards development but Ireland, as an investor rather than a donor, should not be counting the full cost as ODA.

That would amount to cooking the books to inflate our ODA payments.

We still have a journey ahead of us to meet our ODA obligations. The recent report of the Joint Committee on Foreign Affairs and Trade, and Defence indicates that "for Ireland to reach the 0.7% target by 2030, the overall aid programme needs to grow from €707 million (currently) to €2.5 billion, or an increase of €150 million per annum over the period (an increase of close to €1.8 billion)." Budget 2019, announced on 9 October, provides an additional €110 million for 2019 so we are already falling short in respect of what our trajectory should be. We must recall how grossly distorted the State's GDP is but also that there are times, such as when meeting our fiscal targets, that it plays to our advantage. Either way, we must accept we are a long way from reaching our ODA obligations. There has to be a clear trajectory and roadmap from the Government on how it proposes to do this. It should be hived off from the budgetary process in order to make it clear internationally that we stand by our commitments and intend to meet them.

We should not end this debate when the Bill is passed. It is vital that the system relating to ODA is accountable and transparent. Ultimately, this is taxpayers' money and there must be constant oversight of how it is paid, to ensure that when it is paid it is making a meaningful difference to the lives of people in the regions for which it is intended. As part of that, the Tánaiste should attend before the finance committee annually to discuss the Department of Finance's ODA spend so that we can hear more about how it is being spent and the impact it is generating. The joint committee regularly meets the Tánaiste and Minister for Foreign Affairs and Trade to discuss the ODA spent by his Department. The finance committee should do likewise. What is the Minister of State's view on that?

When it announced the decision to take part in this development bank the Department of Finance told us that it was "an opportunity to extend Ireland's reach and impact in terms of trade, in particular through enhancing opportunities for Irish companies to secure project contracts". That may be true but the Department might have led with the fact that it would allow us to aid the development of the continent of Africa in conjunction with the people who live there. Undoubtedly, there are many positives for trade and Irish businesses, but this is a worthwhile decision in its own right purely based on the merits of what the development bank and fund does. That is why, first and foremost, I am supporting this legislation.

I mentioned the need for transparency and accountability. As with the AIIB, the agreement before us could much stronger ar an timpeallacht agus ar chearta daonna, le dhá shampla a thabhairt. Ba chóir go mbeadh sé níos láidre ar na hábhair sin. The agreement could be stronger in the context of the environment and human rights, to give two examples. The African Development Bank is a financial provider to African governments and private companies investing in the regional member countries. I am unaware of what structures, if any, are in place to monitor the human rights due diligence of companies that receive moneys from the African Development Bank. We also must guard against the hollowing out of the state. The state is a key driver in development, not companies that only care about their bottom lines in these regions. Until robust state structures which redistribute wealth and provide for the social needs of citizens are in place and functioning correctly, economic underdevelopment and inequality will continue to exist. Caithfimid béim a chur air sin. Ba cheart go mbeadh na struchtúir ann le cinntiú go bhfuil maoinithe na tíortha seo á roinnt mar is ceart, go bhfuil na nithe sóisialta ann do shaoránaigh agus go bhfuil na coinníollacha cearta eacnamaíochta sna tíortha seo sa dóigh is go mbeidh cothromaíocht iontu.

Many African countries are displaying incredible economic growth on paper but, like in Ireland, that does not reflect the reality of those countries' positions and definitely does not mean that each country is providing for the needs of its citizens. The infrastructure sector, including power supply, water, sanitation, transportation and communications, has traditionally received the largest share of African Development Bank lending. While Africa is not the continent that is producing the worst pollution and degradation of the environment it is one of the hardest hit. We must acknowledge that. It is important for organisations such as the African Development Bank to give financing to programmes to develop renewable energy technologies adapted to the natural environments of different African climates and the unique and specific energy needs of African countries.

I cannot let this opportunity pass without looking at how our other policies interact with development in these regions. I have made this point on numerous occasions, not least when we were discussing the Finance Bill. In particular, I raise the issue when discussing our corporation tax policy and other policies and how they interact with developing nations and territories. When debating the Finance Bill, we discussed how Ireland has chosen the weakest model under the controlled foreign company, CFC, rules and the multilateral convention, where we have opted out of Article 12. These decisions have consequences in other places, and we cannot ignore that. To do so is wrong. Tagann sé salach ar an mhéid atá á dhéanamh againn le tacaíocht a thabhairt don bhanc agus don chiste infreastruchtúrtha seo go bhfuilimid ag glacadh cinntí ar an taobh eile atá impleachtaí diúltachta acu ar na réigiúin seo. Not only has Ireland opted out of Article 12 and chosen the weakest model of the CFC rules and the multilateral convention, it still opposes public country-by-country reporting. That should end now.

Tugaim tacaíocht don Bhille seo and I hope our other policies match much of the rhetoric about the intent behind the Bill that we have heard here today. Given what we are dealing with, is dócha nach mbeidh an Rialtas sásta bogadh ar na hábhair atá luaite agam ag an roghchoiste airgeadais agus ar an Tuarascáil ar ais sa Dáil. É sin ráite, beidh mise agus mo pháirtí ag tabhairt tacaíochta don Bhille seo.

The future of Africa is central to the future of the planet. As Africa, hopefully, enters a period of renaissance continent-wide, we must interrogate what this Bill proposes to do for, and in partnership with, it. Will it represent a positive development in Ireland's relationship with Africa or will it turn our development co-operation programme and Irish Aid into a more exploitative relationship with the continent? Rather than the people, the environment and the ecosystems of Africa benefiting, will it mark a milestone where our relationship with Africa will become a tied aid only relationship in which, as donors, to use an old-fashioned term, or contributors, we will seek to tie our development support to a crudely exploitative model of the type with which Africa is all too familiar? Ireland was never a colonial power as many of our European neighbours were. Reading the list of European countries involved with the development bank, one sees that more than 90% of them were once colonial powers. Although Ireland does not have that history - far from it - we must be fully aware of the appalling cruelty and disaster visited on Africa by European and other colonial powers down through the centuries.

Great African civilisations in places such as Zimbabwe that date back thousands of years lie in ruins because of the exploitation, greed, death and killing in Africa.

Can we think about the legacy of the slave trade on Africa and its impact right up to this day? Can we also consider the horrible legacy of the slave trade, which is racism? Even though the experiences of people coming from Africa to live in Ireland have been mostly positive, we are not entirely free from that. Rather than just turning business people away from any consideration of all the negative things that have happened to Africa, I want to hear the Minister of State say that we can use the Bill as an opportunity to face into these legacy issues, regarding which we also must interrogate ourselves. This is not a pat on the back for Ireland. The sums involved are small and we have not reached our development pledge of 0.7% of GDP to be spent on development projects. This is the context in which we debate the Bill.

We need to be assured that the African Development Bank is not helping vultures and jackals in the way one can see them in the Serengeti by stripping the continent bare as happened in history and leaving the bleached bones to lie there. We need reassurance and some commentary on how this connection with the bank, which was founded in the heady days of liberation and independence of the 1960s, will change for the better. I believe it was Harold Macmillan who spoke of the "wind of change" blowing through the continent when he visited Africa, yet that speech was followed by the horrible decades of apartheid, especially in South Africa. I speak as a former secretary of the anti-apartheid movement in Ireland, and I speak as a former Minister of State with responsibility for ODA. Earlier in my life, I also worked in Tanzania in east Africa. When I became a Minister of State, I did a lot of work in the aftermath of the genocide. Ireland needs to be clear eyed about what it is we intend to achieve with this modest couple of million euro a year. It is an important but modest amount.

Africa is beautiful, immense and incredibly wealthy in culture, natural resources and people. We have to find a language and framework that says we will assist that and not simply exploit it. I am worried at the reference to this connection being just about trade rather than development. A cornerstone of Ireland's development programme has been that it is not a tied aid programme. I want to hear from the Minister of State, Deputy D'Arcy, that he is not arbitrarily changing the policy now for short-term gain, be it to Ireland or to Africa.

We are aware of what happened in Africa's history. Ireland cannot, and should not, turn a blind eye. I refer to some of the areas that are referred to in the Department's papers and in the objectives of the bank. We specifically want to know about the people-centred development, which is about eliminating poverty and developing a positive economic programme. It is for the Minister of State to show us how this will be achieved by Ireland joining the African Development Bank, how it will lead to less exploitation and not more, and how it will empower and provide for African women and children who tend to be at the bottom of the pile when it comes to economic development.

I say all of this in the context of Ireland having signed up to the UN development goals. They have had a lot of success but there is a great deal of corruption in Africa. Corruption is the modern-day problem of Africa that holds it back. Even countries such as South Africa have incredible experience of appalling corruption. Development banks and bankers are sharp people. They can persuade entire countries that a dam here or a river there is in the interests of economic growth but they may move many people away from their traditional lands, which may not be in the interests of a sustainable environment. These issues are difficult and it is difficult to know the right answers to them, but instead of patting ourselves on the back, we should seek to interrogate this. Many people in Ireland have been, and currently are, involved in development in a positive way. We should take many of those people as our models, as opposed to the bankers in the sharp suits. Will there be a reference to ensuring that the IFSC does not develop potential for money laundering such as stealing of assets from poor countries and empowering, in some cases, dictators? Has the Department thought about this and how it might be prevented? What will Ireland's approach be to the endemic problem of corruption in Africa, or are we simply just not going to talk about it? Wherever one goes in Africa, notwithstanding great economic, educational and other developments, corruption is so incredibly pervasive that at times it would make a person despair. It is at the cost of poor people and rural people. It is also at the cost of the drugs they do not have in the health services to cure simple diseases such as malaria and of fair trade. Many restaurants and coffee shops in Ireland are ambassadors for fair trade. The restaurants and the bars in the Houses of the Oireachtas largely buy Fair Trade products. This is positive co-operation that will help people and empower them to grow.

There are very good models such as those developed by Bóthar and many branches of the Irish Farmers Association to help African farmers to improve the breeding of livestock and to provide livestock. These are small businesses and, in many cases, small farms. Is this the model we will choose to assist with business development?

I also want to know from Fine Gael if this will be about Fine Gael businessmen going to African financial partners with Government accreditation or will the party take its courage in its hands and support a financial transactions tax? Africa generates a vast volume of the mineral wealth in the world but it only secures a fraction of that wealth in return for its countries.

I am not saying I expect the Minister of State to be able to provide any of these solutions. I want him to question how our programme might go about beginning to do that in line with current economic developments. I want to ask about heavily indebted poor countries, HIPC, and debt forgiveness for many countries. We know a lot about debt forgiveness in Ireland because we do not get it for people who are very often at the end of their tether in terms of trying to meet mortgage commitments and hold on to their family homes. We know about vulture funds and what they have done since they came to Ireland. I want to know if we can apply the framework of some of the experiences and difficulties we had during the crash, when lots of people lost their employment and huge amounts of whatever wealth they had managed to build up. Out of that learning may come programmes that are both modern and relevant to how we might have a relationship with African countries.

As Nelson Mandela said, we know that the key development tool is education. Will co-operation in terms of education be an appropriate area for development and investment? In particular, what is badly needed in Africa is both apprenticeship training and third level education. I also refer to investment in drugs, for instance to treat malaria, a disease that kills many people and reduces the life capacity of millions right throughout the African continent. We have big pharma all over Ireland. Will we lend some of our expertise to try to get rid of the scourge of treatable diseases like malaria? We have a small NGO here called Engineers without Borders, founded in Ireland by engineers from DIT in particular. Students from all over Ireland take part in projects at third level to look at how to improve water quality, sanitation and conservation in terms of what is happening as a result of climate change. These are all small business-type developments that often have enormous consequences for improving people's quality of life. Has that been given consideration? On agriculture, I am sure the Minister of State is aware that most farmers in Africa are women and most farm assistants in Africa are children. Anything that seriously improves the lives of farmers and children living on small family farms will certainly get my support.

We really have not heard anything about the vision behind this Bill. Are we just signing up to this as something the Department of Finance, the officials and the Minister of the day can be involved in or is there some vision that is ethical, empowering and constructive for ecology and good quality growth that helps people's lives? If the Minister of State can answer these questions I do not think I would have any difficulty in supporting the Bill but I want to hear the answers.

I am sharing time with Deputy Pringle. It has to be acknowledged that Ireland has a special relationship with Africa and that began with the work of many missionaries in education and health. That work has been enhanced and added to by the various Irish NGOs. Central to that work has been community empowerment in those countries in Africa, so that their citizens are providing the education, health and social services that are vital. I have been a member of the Oireachtas Joint Committee on Foreign Affairs and Trade since 2009 and, from that and my involvement with the Association of European Parliamentarians with Africa, AWEPA, I know the respect for Ireland that exists in those countries in the global south.

It has been mentioned that the Joint Committee on Foreign Affairs and Trade, and Defence did a review of our aid programme. We produced it back in February 2018 and after many months it eventually got approximately 30 minutes' debate in the Chamber. Then it was adjourned and has not reappeared. I cannot help contrasting that with the time being given to the African Development Bank. We have three hours now and if that is not enough there will be more hours tomorrow or Thursday. Banking matters obviously take precedence over our overseas development aid, ODA. The committee's conclusions and recommendations recognised and strongly supported the central focus within Irish aid, which is to address the needs of the poorest and the most vulnerable. Ireland has been a strong advocate for maintaining a poverty focused definition of ODA. It is also important to recognise the work of our ambassadors and the embassy staff in the 11 African countries that have a role in the African Development Bank. Countries in Africa trust Ireland. That comes from the fact that our aid is poverty focused and driven by certain targets. The respect and trust are particularly due to the fact that our aid is untied. We have a 100% record in untied aid which means we have not looked for anything in return, until now anyway.

A very strong recommendation from the committee was the need to improve policy coherence. We have the experience and the examples of policy incoherence. We are giving the aid but the incoherence comes with certain tax issues. It also comes in respect of climate change and when it comes to the arms trade. We are giving the aid with one hand while taking it back with the other because of what we are not doing in respect of climate change and tax practices and in failing to stand up at EU and UN level to those countries that are making billions of euro from the arms trade. Our committee strongly recommended a cross-government plan of action as recommended by the OECD, as well as establishing a cross-departmental body to ensure better co-ordination and coherence of development policy across government and in line with the strategic development goals, SDGs. We have been following a coherent policy to date when it comes to the aid-for-trade debate and agenda because of our aid being 100% untied. Because of that, my experience is that African countries do want to trade with Ireland because they trust us that the business will be ethical and fair. While we have the fair trade brand, it needs to be more than just a brand name.

Where does Ireland's membership of the African Development Bank fit in with our existing reputation and the relationships we have had with countries in Africa to date? African countries need to be able to develop their own resources, some of which are considerable. Those resources have to be for the benefit of the people. Some African countries are seeing strong economic growth and are moving into the range of middle-income countries but it is as if they make progress in one direction only for it to be impeded by other factors elsewhere. The ironic reality is that we have strong economic growth alongside extreme poverty. While the mantra for the sustainable development goals is to leave no one behind, millions are being left behind for various reasons, perhaps because of where they live, or because they are female or have a disability; it could be their ethnicity or their gender. Even where the success of the millennium development goals is acknowledged with statistics showing a significant increase in primary school enrolment, for example, such goals can still leave an awful lot to be desired because we are not talking about quality education with the necessary resources and suitably qualified teachers. While there have been positive results in child mortality rates and nutrition, for example the Scaling Up Nutrition programmes, what are these children surviving for if they are to remain in dire poverty, hunger, conflict and displacement? That is why there is a need for policy coherence across all of these areas, including economics and banking.

Irish exports to Africa have been increasing in recent years. In 2017, the total value of exports to Africa was €1.42 billion.

However, we import less than half that amount, resulting in an imbalance there. When it comes to the EU trade agreements there is also a danger of imbalance with these agreements being more to the benefit of the European country. In the context of Brexit I believe we will see more examples of trade being more for the benefit of the non-African countries. I again give a very simple example relating to chickens. There was a lucrative European trade in frozen chicken parts to west Africa and yet west Africa had thriving small businesses selling live chickens. This is where we are seeing that imbalance with the local businesses losing out.

The Library and Research Service has outlined the mission strategy and goals. They refer to inclusive growth and helping Africa gradually transition to green growth. The areas for annual financing needs are as follows: light up and power Africa; feed Africa; industrialise Africa; integrate Africa; and improve the quality of life for the people of Africa. However, the other table dealing with the progress in these is abysmal, as is clear to anyone who visits those countries. If those are the needs, we need more regular progress reports on how those needs are being met. For example, 8.3 million Africans have improved access to water and sanitation. While that is very welcome, it is a very low number. At the same time Africa is experiencing population growth, part of the reason being lack of access to reproductive and sexual health measures.

The business and human rights report eventually came out after a number of years. It is languishing somewhere still waiting to go to the committee and still awaiting implementation. If we are planning to become a member of the African Development Bank, surely the whole area of rights needs to come into that. Some of those on the list of subscribers leave much to be desired on human rights, which makes me wonder who is benefiting. There are also questions over the investment in certain countries in Africa. In particular, I know there are concerns over China and what its agenda is.

On the role of other banks, a recent report showed that 119 countries in the global south were critically in debt. In 87 of them the debt situations had worsened over the past four years and 13 countries had ceased payments to creditors. The IMF loan policy conditions continue to be highly controversial in key economic policy areas. What is Ireland's stance in supporting the non-payment of unjust global south debt? The economic policy conditionality of the IMF and its partnership organisation, the World Bank, has been damaging. The governance of the IMF and the World Bank needs fundamental reform to ensure fair representation of global south nations when it comes to decision making. At least the African Development Bank had 23 African countries as founding members.

I hope our membership of the African Development Bank will be of benefit and will continue the very positive relationship we have had with African countries and will not undermine or demean the relationship that has been built up over many years.

The Bill seeks to establish Ireland’s membership as a non-regional applicant country to the regional multilateral development finance institution, known as the African Development Bank. The bank established in the 1960s declares its aim to be to contribute to the economic development and social progress of African countries. The African Development Bank declares its central mission to be helping to reduce poverty, improve living conditions and mobilise resources for the continent’s economic and social development.

Ireland’s status as an ex-colony with a long history of missionary work fosters a natural relationship between this country and African states. We have a long tradition of offering strong support in programme countries in Africa as part of our overseas development budget. The Government is very open on its policy objective in joining the bank which is to reinforce Ireland’s political, development, economic, trade and cultural relationships.

While development and social progress is the motto from the bank and Ireland’s interests are spread out over trade and cultural relationships, unfortunately significant failings exist in the operation of the African Development Bank. I believe the membership of developed nations in the bank is mainly to blame for these shortcomings. The bank’s ownership structure consists of African and non-African countries. However, over time a situation has developed in which only 11 African countries feature among the top 20 of the bank’s most powerful member countries. Between them, the 11 countries account for only around 40% of the vote.

Ireland’s subscription for membership of the bank will be €65.14 million to be encashed in up to eight annual instalments of approximately €8 million. This would notionally place Ireland 34th of 79 members with a shareholding of 0.799%. Ireland will have a higher percentage share in the African Development Bank than Tanzania, Mauritius, Madagascar and Mozambique. This level of inequality is a huge concern for the African nations involved. How can a small western developed country like Ireland with a population of only 5 million have more voting rights in an international bank than, for example, Tanzania, which has a population of 57.3 million, Madagascar, which has a population of 25.5 million, or Mozambique, which has a population of 29.6 million?

The African Development Bank has failed to retain significant voting power within the region because it is designed and modelled on other international banks set up by developed nations such as the World Bank. These banks are beacons for the global neoliberal agenda, the exact cause of persistent economic poverty in African states. They have promoted a system of trade injustices robbing countries of funds which are rightfully theirs.

Instead of being free to follow economic policies that best suit them, countries in southern Africa are being put under enormous pressure to open up their markets and expose their producers to unfair competition. Trade rules and agreements also often allow big business to profit at the expense of people and the environment. Will Ireland's involvement in the African Development Bank put a stop to that? Unfortunately, I doubt it.

Let us not forget that most development projects in Africa are still World Bank-led, with the African Development Bank only occasionally playing a supporting or facilitation role. African members of the bank are demoted to positions of subservience to richer developed nations and their economic priorities - no doubt neoliberal in nature.

The EU engages in harmful trade practices. According to one analysis, of the 7,000 harmful trade measures implemented by countries across the globe since 2009, more than half have come from the EU. The bank itself has made it clear that the continent’s nations bore the brunt of measures including export taxes, tariff and non-tariff barriers and state aid.

Ireland should be pushing for more democratic change and transparency as part of its membership because as it stands the model the African Development Bank has copied means that development needs are not prioritised based on the fundamental needs of its member countries. The decision-making process is thereby compromised and we are feeding into this neoliberal machine by seeking membership without calling for a change in its governance structure. For effective agenda setting, the bank must revisit its ownership and voting structure with the required acceptance of responsibility this would entail.

Africa cannot afford to replicate neoliberal institutions like the World Bank or maintain their hegemonic existence in nation states. Despite strong economic growth in the past decade, 45.1% of the population of African countries represented in the bank still live in extreme poverty, subsisting on less than $1.90 a day.

Representatives of various African civil society groups met in Dakar from 10 to 12 May 2009, shadowing the 44th annual assembly of the African Development Bank. At this meeting, the performance of the African Development Bank in a number of countries and the role the bank has played in mobilising resources for development on the continent was assessed as was the bank’s relationship with civil society, which is vital for the promotion of the welfare of people in member states as is the stated mission of the bank.

However, these civil society groups remarked on how the bank has drifted away from its original message of welfare of the African people and the development of the continent. In their view the bank had become nothing more than a clone of the international financial institutions. Profitability had replaced meeting the basic needs of the population as the main criterion for project selection. The bank has submitted to the neoliberal agenda by subscribing to the tenets of market fundamentalism. The African Development Bank has further served to promote the very liberalisation and privatisation policies that have exacerbated the economic and social crisis on the continent. The group also felt that the bank had not come up with a single noteworthy initiative of its own to resolve the African debt crisis and has instead merely adopted the proposals put forward by the World Bank and the IMF.

The incorporation of non-African countries has provided these new players a level of unprecedented influence that is not reflective of their investment in the African Development Bank. Many have power of veto over the orientation and the policies of the bank making it a completely undemocratic institution, serving the interests of the global elite.

It has been documented that the African Development Bank does not engage in true dialogue with civil society, preferring to engage in policies that avoid any critique by African citizens.

Civil society groups have called for the following to bring about greater engagement with civil society in its policies and decision-making: first, to establish an information-sharing policy; second, to re-establish an independent environmental assessment mechanism; and third, to consider the long-term financial needs of African countries within the context of sustainable development.

There is a need for Africa-relevant development strategies. The bank's coming of age after 50 years must reflect in its engaged understudy of the region’s problems, development of appropriate strategies and readiness to offer technical support to implement them. Collaboration with experts across African universities is a prudent way of ensuring this. Scholars who study their environment from within are best placed to point to relevant and effective solutions.

Alongside trade justice, will Irish representatives in the bank promote the principle of climate justice? Our economic practices over the past century have caused this global phenomenon and yet it will be the poorest populations paying the highest price. To what extent will funds be used to develop defences for communities most exposed to climate change and will we do our part leading by example on climate change mitigation? Crises due to drought in Africa are certainly not a new phenomenon. However, with climate change, the frequency and intensity has risen sharply over the past decade. Rainfall is becoming increasingly unreliable. As a result, crops fail, animals die, livelihoods are lost and people have no food to feed their families. Many are forced to flee to the cities where they live in slums in appalling conditions. Africa, the poorest and least developed of the world’s regions, will find it particularly difficult to adjust without assistance from developed nations. Although sub-Saharan Africa produces less than 4% of the world’s greenhouse gases, scientists predict with very high confidence that the region’s diverse climates and ecological systems have already been altered by global warming and will undergo further damage in the years ahead. A third of Africa’s people already live in drought-prone regions and climate change could put the lives and livelihoods of an additional 75 million to 250 million people at risk by the end of the next decade. Flood-prone areas in southern Africa, on the other hand, are likely to become wetter as rainfall patterns shift, causing floods to become more frequent and severe and diverting resources from development to emergency relief. Ireland must address the issue of climate justice on global platforms like African Development Bank and use its political and economic leverage to encourage alternative economic models suited to African nation states and their populations' needs. It must encourage the opening up of the bank towards more democratic and transparent governance structures and decision-making processes with central involvement from civil society. Unfortunately, I do not think we will do that.

I will interrupt the Minister of State at 8 p.m. and ask him to propose the adjournment of the debate.

I will make sure to conclude by then because I want to move on to the next Stage. A significant number of questions have been asked by all who contributed. I do not have the answers to all the questions so I will not pretend. We can try to get into more detail on Committee Stage.

In the context of our international development policy with regard to extending our influence in the African region in line with the objectives of the 2025 initiative, we feel this is the best way of doing it. Deputies noted the important work of African Development Bank in contributing to the economic and social development of the African region and its important role in continuing to drive its economic transformation for the future. Like other development banks, it has a role which is to provide funding for ethical projects. It was very similar to the conversation we had about the AIIB. The objective here is not that Ireland will invest in an institution that will just operate as it sees fit. There are governance structures in place and I will touch upon them.

The fund will require the approval of our membership by the board of directors and subsequently by the board of governors. It is expected it will take place at the next annual meeting in June 2019 in Malabo. That will complete our membership.

With regard to the bank's safeguards and standards and the question about how Ireland can influence these, this section encompasses most of the questions that have been asked. African Development Bank's integrated safeguard system adopted in 2013 is the cornerstone of its strategy to promote growth that is socially inclusive and environmentally sustainable. As I have already mentioned, safeguarding standards are already in place in which MOPAN found that African Development Bank is particularly strong. It is highlighted by the assessment that facilitates the delivery of high social and environmental standards including through the screening of all projects at the bank against gender, environment and climate change criteria.

Specifically with regard to gender, 2017 saw the gender, women and civil society department become fully operational and the approval of the gender marker system, the bank's approach to mainstreaming gender in its operational work, with the roll-out taking place this year.

On climate change, African Development Bank has pledged triple climate financing to reach 40% of investments by 2020. In 2017, African Development Bank made strides on these targets with about 28% of all approvals allocated as climate finance.

On how Ireland can input into this area, as in the case of the other multilateral development banks, Ireland will seek to use its influence in co-ordination with our members and constituency partners to ensure the high performance and standards of African Development Bank are maintained or improved where necessary as the bank evolves.

A question has been asked about Ireland. Is Ireland progressing in meeting the UN target of 0.7% of GNP on ODA? The programme for Government sets out our ambition to make progress on this target as resources allow. This commitment reaffirms our global initiative 2025, which was published this year. Based on current forecasts we anticipate the percentage of ODA for 2017 having reached 0.3% of GNP. However, recent revisions of GNP have reduced this percentage despite increases in overall funding for ODA in recent years. The Government's ambition is to meet the 0.7% target through sustained managed increments. ODA will be required. Ireland will continue to work towards this target as economic circumstances allow but our contributions to African Development Bank and fund will also develop and contribute towards that.

I look forward to a more detailed discussion on Committee Stage.

Question put and agreed to.
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