MDB Results 2026: An Independent Assessment — Day 2, Part 3 of 5
Part 3: The Cold War That Never Ended
Kofi went outside.
He stood on 19th Street and looked at both buildings. The IMF to his left. The World Bank to his right. One narrow street between them.19th Street NW. Every Finance Minister since WW2 has walked this street.
The genie materialised on the kerb beside him. Still made of paper. Still numbers flickering. But sitting in the morning sun with the expression of someone watching something that had been going on for a very long time and was no closer to being resolved.
“They are staring at each other,” said Kofi.
“They have been staring at each other since 1944. Eighty-two years. Neither willing to cross the street.”
“Why would they need to cross the street?”
“Because they are doing the same work. To the same countries. With the same Finance Ministers. And nobody — not the countries, not the Finance Ministers, not the shareholders who own both ships — has been able to make them stop.”
“The 1944 design was clean,” said the genie. “The battleship — short-term, macroeconomic, balance of payments. The cruise ship — long-term, investment, development. Different mandates. Almost different clients. The IMF for countries in crisis. The World Bank for countries building.”
“What happened?”
“Both ships grew. And as they grew, both discovered that the most prestigious work — the work that generated ministerial access, Board-level relevance, and institutional status — was macroeconomic policy dialogue. Fiscal consolidation. Revenue reform. Debt management. Public financial management. The subjects Finance Ministers care about most.”
“And so both ships went after the same territory,” said Kofi.”
“The IMF expanded into public financial management — running technical assistance through the AFRITACs, advising on treasury systems, procurement, payroll. The World Bank expanded into macroeconomic frameworks — running its own debt sustainability analyses, producing country economic memoranda, attaching fiscal conditions to budget support loans that look remarkably like balance-of-payments support. Eighty-two years of mission creep. Both directions. Across one street.”
“Tell me about Nigeria,” said Kofi. “And Ghana.”
“In Nigeria, both ships were present for years. Both had resident offices. Both had relationships with the Finance Ministry. Both had opinions about the fuel subsidy — the government subsidy on the price of petrol that was costing the country billions of dollars every year. Both agreed it needed to change. But they did not agree on how, or when, or in what sequence.”
“What did the battleship say?”
“The IMF, through its Article IV consultations and programme design from 2016 to 2022, consistently demanded accelerated removal of the fuel subsidy as a fiscal consolidation priority. It said: remove it now. The fiscal cost is unsustainable.”
“And the cruise ship?”
“The World Bank, through its Development Policy Operations, conditioned financing on improving the transparency of the subsidy system and gradually reforming it — not on elimination. Its macro advisors signalled that a phased approach was acceptable. Both positions are documented in public programme documents.”
“So the Finance Ministry received two authoritative, contradictory instructions from two creditors who were both offering money.”
“For six years. The rational response was to implement neither fully and collect from both. The subsidy bill reached 4.4 trillion naira — approximately ten billion dollars — by 2022. A direct consequence of six years of incoherent external pressure from two ships staring at each other across 19th Street.”
“And Ghana?”
“Ghana is the clearest illustration of what happens when both ships are present but not speaking to each other. The IMF’s 2021 Article IV consultation flagged Ghana as high risk of debt distress and explicitly advised against further non-concessional borrowing. That is on the public record. At the same time, the World Bank was preparing a new Development Policy Operation for Ghana. The IMF was raising the alarm. The cruise ship was preparing a new loan. The government, facing two different signals from two authoritative creditors, used the more comfortable message to justify continuing. The debt crisis materialised in 2022. Ghana sought an IMF programme. Debt restructuring followed. The cost to the country was enormous.”
“If both ships had said the same thing,” said Kofi, “the government could not have chosen.”
“Two contradictory signals from two authoritative creditors is a choice. One clear signal from both is a wall. Governments can walk through a choice. They cannot walk through a wall.”
“Has anyone tried to fix it?” Kofi asked.
The genie produced a timeline.
“So for 35 years both ships have been agreeing that the problem exists,” said Kofi.
“And the macro-fiscal functions at both institutions are larger today than when the first concordat was signed. The problem has grown. The frameworks have multiplied. The Finance Ministers keep standing between the two ships holding contradictory instructions.”
“How much does it cost?” Kofi asked.
“Between 750 million and one billion dollars a year. Duplicate missions. Duplicate frameworks. Finance Ministers in fragile states — some with twenty professional staff — managing two competing reform matrices from the same street in Washington.”
“A billion dollars a year. For 35 years. To produce no measurable reduction in duplication.”
He paused.
“In three weeks both ships will fill with the Finance Ministers of the world. The Spring Meetings. The communiqués will be drafted. Both ships will announce new frameworks. The rainfall of paper will begin.It will be a torrent. Then the Finance Ministers will cross 19th Street again and go home.”
“The DC public works department will need weeks with wheelbarrows to clear 19th Street when it is over.”
“And then?”
“ The two ships will then resume their positions. Facing each other. Keeping no score. Staring. Waiting for the next carnival.”
“Can the emperor not sort this out?” Kofi asked. “The man at the end of the avenue. He owns both ships.”
“The emperor could sort this out before lunch. He is the largest shareholder of both institutions. One instruction — one line in one replenishment agreement — and both captains would be in the same room by Thursday.”
“Then why doesn’t he?”
“Because two ships means two channels of pressure on the same Finance Minister. Two sets of conditions. Two levers of influence. You can push for fiscal consolidation through the battleship while funding government spending through the cruise ship. Two ships gives you options that one ship does not.”
“So the emperor does not want the cold war to end,” said Kofi.
“The emperor,” said the genie, “is a very busy man.”
Kofi looked at the two buildings one more time.
“What would actually fix it?”
“One thing that coordination has never achieved: budget conditionality. Tell both ships: your administrative budgets will not grow until the duplication metrics are published and declining. Link the next replenishment — IDA, the PRGT — to structural mandate reform. Apply to the ships the same conditionality both ships apply to every borrowing government they deal with.”
“Apply to the ships,” said Kofi, “what the ships apply to everyone else.”
“Yes,” said the genie. “That is the whole argument.”
Part 1: The Ship That Does Not Keep Score
Part 2: Nigeria and the Africa-Wide Emergency
Part 3: The Cold War Across 19th Street (this piece)
Part 4: The Homework the IMF Does Rate: AFRITAC and the Score That Has Not Moved
Part 5: Europe’s Chair
Full series at mdbreform.com