On Tuesday, May 24, Nigerian Central Bank Governor Godwin Emefiele announced that the country will adopt a more flexible foreign exchange rate system in the near future. This move signals a major policy shift by Emefiele and President Muhammadu Buhari, who had until this point opposed calls to let the naira weaken. Many international oil-related currencies have depreciated against the dollar as oil prices began their decline in 2014. Nigeria, however, has held the naira at a peg of 197-199 per U.S. dollar since March 2015, depleting foreign reserves and deterring investors, who remain concerned about the repercussions of a potential naira devaluation. Following the announcement, Nigerian stocks jumped to a five-month high and bond prices rose in anticipation that a new flexible exchange rate regime would increase the supply of dollars and help attract foreign investors.

For now it remains unclear exactly what a more flexible system will entail for Nigeria, however, some experts suggest that the Central Bank may introduce a dual-rate system, which allows select importers in strategic industries to access foreign currency at the current fixed rate, while more generally foreign currency will be available at a weaker, market-related level. This new regime raises a number of questions, including how it will be governed and who will have access to foreign currency (and at what rate). On Wednesday, Nigeria’s parliament requested a briefing soon from Emefiele and Finance Minister Kemi Adeosun to provide additional clarity on the new system, although the date for such a meeting has not yet been set.

Earlier this month, Kenya announced plans to close the Dadaab refugee camp, located in northeast Kenya, amid security concerns. The move to close the camp has been widely criticized by international actors. United States State Department Press Relations Director Elizabeth Trudeau urged Kenya to “uphold its international obligations and not forcibly repatriate refugees.” The United Nations High Commissioner for Refugees stated that the closure of the refugee camp would have “devastating consequences.” Despite these concerns, this week, at the World Humanitarian Summit, Kenya stated that it will not go back on its decision and confirmed the closure of the refugee camps within a six-month period.

The camp houses 330,000 refugees, a majority of whom fled from conflict in their home country of Somalia. Kenya insists that the camp poses a threat to its national security, as it believes the camp is used to host and train extremists from Somalia’s Islamist group al-Shabab. Kenya also argued that the developed world, notably the United Kingdom, should host its fair share of African refugees. This is not the first time Kenya has threatened to close the refugee camp. After the Garissa University attacks last April, Kenya voiced its decision to close the refugee camps, although it did not follow through with the plan.

From May 23-27, Lusaka, Zambia hosted 5,000 delegates and participants for the 2016 Annual Meetings of the African Development Bank (AfDB), with the theme, “Energy and Climate Change.” Held in the wake of December’s COP21 climate agreement and in line with Sustainable Development Goals 7 (ensure access to affordable, reliable, sustainable and modern energy for all) and 13 (take urgent action to combat climate change and its impacts), the theme was timely and, as many speakers emphasized, urgent. Around 645 million people in Africa have no access to electricity, and only 16 percent are connected to an energy source. To that end, AfDB President Akinwumi Adesina outlined the bank’s ambitious aim: “Our goal is clear: universal access to energy for Africa within 10 years; Expand grid power by 160 gigawatts; Connect 130 million persons to grid power; Connect 75 million persons to off grid systems; And provide access to 150 million households to clean cooking energy."

As part of a push to transform Africa’s energy needs and uses, Rwandan President Paul Kagame joined Kenyan President Uhuru Kenyatta on a panel to support the AfDB’s “New Deal on Energy” that aims to deliver electricity to all Africans by 2025. Kenyatta specifically touted the potential of geothermal energy sources. Now, 40 percent of Kenya's power needs come from geothermal energy sources, he said, but there is still room for improvement—private businesses, which make up 30 percent of Kenya’s on-grid energy needs, have not made the switch yet.

As part of the meetings, the AfDB, the Organization for Economic Cooperation and Development (OECD), and United Nations Development Program (UNDP) also launched their annual African Economic Outlook, with the theme “Sustainable Cities and Structural Transformation.” In general, the report’s authors predict that the continent will maintain an average growth of 3.7 percent in 2016 before increasing to 4.5 percent in 2017, assuming commodity prices recover and the global economy improves.  However, the focus was on this year’s theme: urbanization. The authors provide an overview of urbanization trends and highlight that successful urban planning can discourage pollution and waste, slow climate change, support better social safety nets, enhance service delivery, and attract investment, among other benefits.

For more on urbanization in sub-Saharan Africa, see Chapter 4 of Foresight Africa 2016: Capitalizing on Urbanization: The Importance of Planning, Infrastructure, and Finance for Africa’s Growing Cities.

Event Information

Despite the attention on the mid-term races, few elections are competitive. Electoral competition, already low at the national level, is in decline in state and primary elections as well. Reformers, who point to gerrymandering and a host of other targets for change, argue that improving competition will produce voters who are more interested in elections, better-informed on issues, and more likely to turn out to the polls.

On October 27, the Brookings Institution—in conjunction with the Cato Institute and The Pew Research Center—presented a discussion and a groundbreaking survey exploring the attitudes and opinions of voters in competitive and noncompetitive congressional districts. The survey, part of Pew's regular polling on voter attitudes, was conducted through the weekend of October 21. A series of questions explored the public's perceptions, knowledge, and opinions about electoral competitiveness.

The discussion also explored a publication that addresses the startling lack of competition in our democratic system. The Marketplace of Democracy: Electoral Competition and American Politics (Brookings, 2006), considers the historical development, legal background, and political aspects of a system that is supposed to be responsive and accountable, yet for many is becoming stagnant, self-perpetuating, and tone-deaf. Michael McDonald, editor and Brookings visiting fellow, moderated a discussion among co-editor John Samples, director of the Center for Representative Government at the Cato Institute, and Andrew Kohut and Scott Keeter from The Pew Research Center, who also discussed the survey.

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It certainly seems that way, judging by recent developments. Capital increases for the World Bank, for the Asian Development Bank (AsDB), for the African Development Bank (AsDB), and for the Inter-American Development Bank (IADB) are nowhere in sight, despite their constrained lending capacities. Replenishments of their soft-loan windows have been anemic. They face divisive debates about what role emerging economies should play in their governance and how their leaders should be selected. Competitors are nipping at their heels, with the Asian Infrastructure Investment Bank (AIIB) only the most recent example. News of drastic financial restructuring of the AsDB and of protracted reorganization in the World Bank add to the questions about where the traditional Multilateral Development Banks (MDBs) are headed.

So let’s unpack what are the key challenges – and the main opportunities – that the traditional MDBs face. Based on the discussion at a recent roundtable of MDB representatives organized by International Fund for Agricultural Development (IFAD) in Rome, I see seven principal challenges:

• Progress in reducing extreme poverty and the in graduation of many low-income countries to middle-income status has reduced the rationale for aid and the apparent need for MDBs.
• The rapid growth of development finance channels means increasing competition in a crowded field of financial actors (private and non-governmental financial flows, new development finance institutions and vertical funds, and non-traditional donors).
• Traditional donors face increasing domestic pressure to channel aid resources through their bilateral aid organizations, and they show a growing preference to earmark their funding, rather than support general core financing for MDBs. 
• MDBs face a dramatic growth of competing knowledge providers (international and national consulting firms, universities and think tanks).
• Inflexible governance structures limit the attractiveness of MDBs to their borrowers and to new donors. With traditional donors unwilling to give up control over vote, voice, leadership selection and lending practices, borrowers see the MDBs as unresponsive, risk averse, burdensome and costly. Emerging economy donors find MDBs unable or unwilling to absorb increased contributions with associated shifts in votes, voice and control. And since non-governmental actors cannot participate in the MDB governance structures, they do not contribute to MDB funding.
• The revival of Cold War/East-West confrontation risks politicizing the institutions’ lending practices – the World Bank and European Bank for Reconstruction and Development (EBRD) stopped lending to Russia in the wake of the sanctions imposed by the West – and reinforces incentives for setting up new institutions.
• Most MDBs find it difficult to engage directly with the private and social enterprise sectors. Due to constraints in their statutes, policies and staff capacity MDBs have not been able to provide much direct financing for private investments.

But there are also opportunities that the MDBs can capitalize on:

• Despite the challenges that MDBs face in borrowing and donor countries, overall they remain trusted partners, due to a unique combination of strengths: their traditional political neutrality, freedom from special interests and corruption, technical professionalism, long-term development perspective and hands-on program design and finance engagement. Overdue reform of MDB governance and processes and effective resistance to political pressures can increase the trust all members put in them.
• As we face increased risks of geo-political fragmentation, regionalization, and confrontation, the world will need the truly multilateral MDBs more rather than less, since they offer globally inclusive forums and instruments to help address pressing global and regional issues.
• Despite remarkable progress, poverty reduction remains a huge task. Elimination of extreme poverty ($1.25pd) by 2030 is a valid goal; but its achievement will not eliminate poverty. The billions of people living below $5pd are poor. Poverty reduction will remain a valid goal for MDBs long beyond 2030.
• The Post-2015 and climate change agendas provide a window of opportunity for MDBs to demonstrate their continued, and indeed enhanced, relevance to the global sustainable development agenda in low-income and middle-income countries. The huge role of European Investment Bank in the European Union is one demonstration of the important role MDBs can play even for the advanced countries.
• The MDBs’ unique package of services provides better value than the services offered by many competitors. Their combination of strong project preparation, supervision and finance, their attention to indebtedness constraints and sustainability requirements, their focus on policy and institutional capacity and their ability to forge multi-stakeholder partnerships provide strong and effective support. MDBs provide a steady compass in helping shift countries’ national priorities from short-term expediency to sound long-term policies and programs for sustained impact at scale.
• MDBs have shown that they play a key role in responding to economic crises, natural disasters and conflict, as demonstrated for example by their response to the global financial and economic crisis of 2008/9.
• MDBs can increase the leverage of their financial resources, as demonstrated by the recent restructuring of the AsDB, and broaden their engagement with the private sector, building on the successful experience of the International Finance Corporation and EBRD.

In sum, the creation of many copycat development banks demonstrates the remarkable strength and durability of the basic MDB model. As long as the traditional MDBs squarely face the challenges and opportunities, there’s plenty of life left in their old bones.

Executive Summary

Two-thirds of Americans have broadband Internet access in their homes.[1] But because of poor infrastructure or high prices, the remaining third of Americans do not. In some areas, broadband Internet is plainly unavailable because of inadequate infrastructure: More than 14 million Americans – approximately 5 percent of the total population – live in areas where terrestrial (as opposed to mobile) fixed broadband connectivity is unavailable.[2] The effects of insufficient infrastructure development have contributed to racial and cultural disparities in broadband access; for example, terrestrial broadband is available to only 10 percent of residents on tribal lands.[3]

Even where terrestrial broadband connectivity is available, however, the high price of broadband service can be prohibitive, especially to lower income Americans. While 93 percent of adults earning more than $75,000 per year are wired for broadband at home, the terrestrial broadband adoption rate is only 40 percent among adults earning less than $20,000 annually.[4] These costs also contribute to racial disparities; almost 70 percent of whites have adopted terrestrial broadband at home,   but only 59 percent of blacks and 49 percent of Hispanics have done the same.[5]

America's wireless infrastructure is better developed, but many Americans still lack wireless broadband coverage. According to a recent study, 3G wireless networks cover a good portion of the country, including 98 percent of the United States population,[6] but certain states have dramatically lower coverage rates than others. For example, only 71 percent of West Virginia's population is covered by a 3G network.[7] Wireless providers will likely use existing 3G infrastructure to enable the impending transition to 4G networks.[8] Unless wireless infrastructure expands quickly, those Americans that remain unconnected may be left behind.

Though America is responsible for the invention and development of Internet technology, the United States has fallen behind competing nations on a variety of important indicators, including broadband adoption rate and price. According to the Organization for Economic Cooperation and Development's survey of 31 developed nations, the United States is ranked fourteenth in broadband penetration rate (i.e. the number of subscribers per 100 inhabitants); only 27.1 percent of Americans have adopted wired broadband subscriptions, compared to 37.8 percent of residents of the Netherlands.[9]

America also trails in ensuring the affordability of broadband service. The average price for a medium-speed (2.5Mbps-10Mbps) Internet plan in America is the seventeenth lowest among its competitor nations. For a medium-speed plan, the average American must pay $38 per month, while an average subscriber in Japan (ranked first) pays only $22 for a connection of the same quality.[10]

The National Broadband Plan (NBP), drafted by the Federal Communication Commission and released in 2010, seeks to provide all Americans with affordable broadband Internet access.[11] Doing so will not be cheap; analysts project that developing the infrastructure necessary for full broadband penetration will require $24 billion in subsidies and spending.[12] President Obama’s stimulus package has already set aside $4.9 billion to develop broadband infrastructure,[13] and some small ongoing federal programs receive an annual appropriation to promote broadband penetration.[14] However, these funding streams will only account for one-third of the $24 billion necessary to achieve the FCC's goal of full broadband penetration.[15] Moreover, developing infrastructure alone is not enough; many low-income Americans are unable to afford Internet access, even if it is offered in their locality.

To close this funding gap and to make broadband more accessible, the National Broadband Plan proposes to transform the Universal Service Fund – a subsidy program that spends $8.7 billion every year to develop infrastructure and improve affordability for telephone service – into a program that would do the same for broadband Internet.

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