A financial straitjacket? Côte d’Ivoire’s National Development Banks

Abstract

The lack of financing options for African firms has led to a reappraisal of the role National Development Banks (NDBs) can play in promoting structural transformation the region. Through an analysis of bank data and policy reports, I argue that the focus on corruption by the mainstream to explain the lacklustre performance of NDBs in developing and emerging economies is overemphasised. Specifically, such arguments fail to account for underlying structural and relational asymmetries between financial sector participants, which make it difficult for NDBs to accomplish their mission. In Côte d’Ivoire, these constraints are characterised by a monetary system inherited from the colonial period that prioritises exchange rate stability over credit creation. The increasing push by International Financial Institutions to commercialise state banking is also causing the main Ivorian NDB (the Banque Nationale d’Investissement) to prioritise financial intermediation over the provision of credit to enterprises in productive sectors.