At the helm of the African Development Bank (AfDB) since 2015, Nigeria’s former agriculture minister Akinwumi Adesina won a major battle by convincing international shareholders to participate in the bank’s next capital increase.
“We had vigorous debates. And I have taken many notes on what you said, I can guarantee you that,” said Adesina at the 54th Annual Meeting of the AfDB, in Malabo, Equatorial Guinea last month.
“All the governors agreed on the need for a substantial increase in capital,” Côte d’Ivoire’s development minister Kaba Nialé said on the sidelines of the Malabo meeting.
Devil in the details
However, the bank still needs to reach consensus on the level of funding. Adesina would like to see the capital base double, but that is opposed by most non-African shareholders. “We will reach a final agreement [on this issue] at a meeting in Sharm el-Sheikh, Egypt in September and we will act on it in October in Abidjan,” said Nialé.
While completing the capital increase, the AfDB’s eighth president is also thwarting opposition to his re-election. “President Adesina has done a tremendous job. He was able to give scale and dimension to our bank, in terms of financing volume, ambition and above all vision,” said Nialé.
While Niale openly supports Adesina, others are more cautious, playing their cards close to their chests.
“The election will be held in 2020. Of course, applications are open. I invite you to be with us next May to find out who will be the fortunate one,” said Ingrid Ebouka-Babackas, Minister of Planning of Congo.
The bank has disbursed more than $34bn in the past seven years, but non-African governors are critical of the institution’s weaknesses, calling for further reforms. The AfDB claims the personnel vacancy rate is dropping, reaching 14% at the end of 2018.
Japan is willing to support “reasonable levels of equity capital” on condition that AfDB management “strengthen staff and organisational capacity,” according to Shinichi Isa, Japan’s undersecretary of finance.
“The bank is not yet where it should be to ensure an effective service and should strengthen its institutional capacity, improve operational quality and adopt a management system based on results rather than the volume of loans,” said Mathew Haarsager, deputy assistant secretary of the US Treasury.
However, some international shareholders are making demands that are far from the continent’s priorities or completely contradict them. For example, the United States has focused on cost control, while disengaging from the continent’s fight against climate change.
Big shoes to fill
Two previous bank presidents, Morocco’s Omar Kabbaj (2000) and Rwanda’s Donald Kaberuka (2010), were re-elected by acclamation. However, early into his mandate, Adesina faced a string of resignations. Three vice-presidents – Ghana’s Solomon Asamoah, Côte d’Ivoire’s Albéric Kacou and Tanzania’s Frannie Léautier – left his side.
“We will strengthen institutional, human and operational capacities,” promised Adesina.
The bottom line: Akinwumi Adesina has his work cut out for him if he wants to remain the president of the AfDB. He needs to reassure African and non-African shareholders, while responding to his critics and revamping the institution.
This article first appeared in Jeune Afrique.
Understand Africa's tomorrow... today
We believe that Africa is poorly represented, and badly under-estimated. Beyond the vast opportunity manifest in African markets, we highlight people who make a difference; leaders turning the tide, youth driving change, and an indefatigable business community. That is what we believe will change the continent, and that is what we report on. With hard-hitting investigations, innovative analysis and deep dives into countries and sectors, The Africa Report delivers the insight you need.View subscription options