AfDB lobbies US for funding boost as Africa struggles with multitude of crises

By Julian Pecquet
Posted on Friday, 3 June 2022 09:59

African Development Bank's President Akinwumi Adesina waves as he arrives for a dinner on the first day of the Paris Peace Forum, at the Elysee Palace in Paris, France, November 11, 2021. REUTERS/Gonzalo Fuentes
African Development Bank's President Akinwumi Adesina waves as he arrives for a dinner on the first day of the Paris Peace Forum, at the Elysee Palace in Paris, France, November 11, 2021. REUTERS/Gonzalo Fuentes

Africa’s largest multilateral development finance institution has launched a lobbying push to boost US funding and increase the bank’s visibility in Washington as the continent struggles with a multitude of crises.

The African Development Bank (AfDB) hired a veteran of the US aid ecosystem in early April to lobby for “increased appropriations”, according to a newly disclosed lobbying filing. Working the account is Jennifer Mack, a former deputy assistant administrator at the USAID Bureau for Food Security.

The campaign comes as Africa is getting walloped by the fallout from the war in Ukraine even as it continues to suffer the repercussions of the Covid-19 pandemic. AfDB President Akinwumi Adesina has sought to position the bank as an emergency resource to tackle the worsening food insecurity crisis that is affecting tens of millions of people across the continent, including a $200m ask from Congress.

“My efforts are to just broaden and deepen support,” Mack tells The Africa Report. “Of course, that normally means money.”

Low visibility

The US is the second-largest shareholder at the Côte d’Ivoire-based AfDB, with 6.4% of total shareholding (behind Nigeria with 9.1%). It’s also the only shareholder to have its own seat.

Despite this, the bank lacks clout in Washington, where it lacks an office like other regional institutions, such as the Asian Development Bank or the Inter-American Development Bank. Mack says her main function is to “really raise awareness about the bank” on Capitol Hill in order to boost interest ⁠— and support ⁠— in Congress.

There’s been a lot of talk over the years about opening an office for the African Development Bank

“Appropriators and authorisers on the Hill […] haven’t had regular access to the multilateral development banks, and I think that’s a reason why there isn’t as much support for them right now,” she says. “There’s just not a good understanding of what they do, so I’m trying to help kind of tell that story and help them understand what the advantages are to a multilateral development bank ⁠— especially in Africa at this point in time.”

The AfDB is particularly vulnerable to being sidelined as development institutions around the world clamour for scarce funds.

Compared to other regional banks, its footprint is relatively small – the AfDB approved about $3.4bn in financing in 2021, according to the US Treasury Department, while its sister firm, the African Development Fund, approved another $2.4bn in grants and concessional loans for the poorest countries in Africa. Its Asian and American counterparts by contrast financed about four times more.

Meanwhile, the Cairo-based Afreximbank is building its own case for increased donor support.

Perhaps more concerning for the AfDB is that donor countries directed much of their aid to Africa through the World Bank during the pandemic, says Clemence Landers, a policy fellow at the Centre for Global Development (CGD) in Washington. Although the AfDB’s pre-Covid-19 lending of about $10bn a year collapsed, the World Bank’s International Development Association (IDA) last year secured a record $93bn replenishment package to help low-income countries – more than 70% of which went to Africa.

Landers tells The Africa Report that establishing a US presence is a step in the right direction.

“There’s been a lot of talk over the years about opening an office for the African Development Bank, a lot of back and forth on that,” she says. “I actually personally think it’s a good idea. I think they’ve suffered a lot by not having a presence in DC.”

Money talks

Even without a US team, Adesina has lived up to his reputation as an energetic bank leader in Washington.

Just off his visit to the capital for the spring meetings of the World Bank and the IMF, the 62-year-old former Nigerian minister of agriculture addressed Senate appropriators via videoconference from Accra on 11 May to ask them for $200m in emergency funding for a proposed $1.5bn Africa Emergency Food Production Plan. The goal: rapid production of 38m tons of food across Africa over the next two years.

“The African Development Bank, with your support, is prepared to meet this new challenge and others head-on,” he told lawmakers.

The bank is also hoping to get the US funding it was promised in years past. As of March 2022, unmet US commitments to the AfDB amounted to $380m, according to the US Treasury Department, potentially jeopardising American influence at the institution.

Then there’s this year’s replenishment talks for the AfDB. Because the fund offers grants and below-market loans to the poorest 37 countries in Africa, the fund must go to donors every three years to ask for more money.

In 2019, the fund raised $7.7bn, with the Donald Trump administration pledging just under $514m. This year, the bank is considering asking donors for as much as $24bn, The Economist reports.

Landers and two of her colleagues argued for a smaller yet still substantial $10bn in a May 2022 CGD paper. The bank notably earns high marks as a funder of infrastructure projects on a continent facing a $100bn annual financing gap, as well as on its transparency  and responsiveness to long-term development challenges. As such, their proposal recommends allocating funds in four areas: resilient, green and inclusive infrastructure ($5bn); regional integration ($2bn); climate change adaptation ($2bn); and sustainable debt enhancement ($1bn).

The CGD paper argues that the bank still has a unique role to play alongside the World Bank and other institutions and need not lose out to the IDA.

“AfDB should not resign itself to this state of affairs,” the paper says. “Donors and management should instead use this replenishment to begin to carve out a separate lane for the AfDB and differentiate its offer … to develop a more efficient division of labour between the institutions.”

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