Since he was appointed chairman of the board of directors of Ecobank at the end of June, the way Alain Francis Nkontchou, 57, speaks has not changed in substance. The former investment banker, co-founder of asset manager Enko Capital, expects the financial sector to support African economies better.
AfDB: Breaking down Adesina’s actual record as president
Running to succeed himself, Akinwumi Adesina’s re-election standing for the presidency of the pan-African institution has nevertheless been weakened over the last few months by internal allegations. Read on for an overview of the main projects he has initiated since joining the institution in 2015.
“And that lone question – do you friend, even now, know what it is all about?” Thus ends “Civilian and Soldier”, a famous poem by the Nigerian Nobel-prize winning writer Wole Soyinka, evoking a brutal and futile confrontation.
In the arduous and proud defence Akinwumi Adesina has mounted in recent months in response to his critics at the African Development Bank (AfDB), he has often given the impression of harking back to the question posed by his illustrious fellow countryman, also a native of south-west Nigeria.
Described by his close colleagues as a tireless, results-obsessed worker with a keen eye for detail, the person who has been at the helm of the largest pan-African financial institution since September 2015 thought for a long time that his record would be enough to quiet the criticism his abrupt decisions drew from his team and even some of the bank’s shareholders.
He also believed that his record would ensure his smooth re-election as president of the AfDB.
Alas, since the end of January, when a group of whistle-blowers sent a letter to the institution’s Ethics Committee denouncing his governance, human resources management and controversial contract approvals, the former Nigerian agriculture minister has been on the defensive. The situation has reached the point that his re-election prospects appear to be threatened in August.
Free of any bias regarding Adesina’s case and at a time when the Office of the Board of Governors has asked Mary Robinson, the former President of the Republic of Ireland, to conduct an “independent review”, this overview seeks to focus on the content of Adesina’s record.
When he arrived at the AfDB in 2015, after the 10-year presidency of Rwanda’s Donald Kaberuka, the Nigerian bank head used all of his communication powers to get his ambitious programme focusing on five priority areas, known as the High 5s, adopted, with the objective of achieving its aims by 2025.
As his term comes to a close, an analysis of the AfDB’s annual development effectiveness reviews (ADERs, drafted by a team at the institution) and annuals reports, along with interactions with experts, provide us with a clear picture of his record.
1. Energy: tangible progress, but it has not lived up to expectations
In February 2016, Adesina said that “Africa’s electrification is the real priority. It’s the lifeblood of the economy.”
In this area, the AfDB has made more qualitative than quantitative progress. The financing it provided has made it possible to add around 500 MW of installed power capacity per year between 2016 and 2018 (the annual objective was 880 MW).
The bank has improved its energy mix by putting a greater emphasis on renewables, with installed “green” power capacity increasing from 41 MW in 2016 to 191 MW in 2018.
Drawing on its experience in Morocco (with the Ain Beni Mathar and Ouarzazate projects), the bank has backed such initiatives as the creation of the Ségou solar power plant in Mali (33 MW), the largest of its kind in West Africa, and the Nachtigal hydropower plant in Cameroon (420 MW), currently under construction, whilst investing in power interconnection projects.
As of 2017, the AfDB has also contributed to developing off-grid solutions by providing funding to governments and companies.
In addition, as of September 2019, the institution no longer funds coal-fired power plants and withdrew two months later from Kenya’s Lamu project (980 MW).
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Although the AfDB approved nearly $2bn in energy projects per year between 2016 and 2018 (lower than the $2.4bn estimated), project implementation delays, which lead to cost overruns and slow down the process, are long.
The rate of non-performing operations (i.e., those at risk of being cancelled) was 27% in 2018, compared to 25% in 2015, with the objective for 2025 set at 12%.
In addition, even though disbursements are significantly up under Adesina’s leadership (peaking at $7.73bn in 2017), the bank has struggled to bridge the gap between approvals and disbursements.
2. Agriculture: transformation process underway
“The AfDB takes a sensible approach focused on value chains, linking production, processing and marketing,” says Peter Sullivan, public sector head for Africa at Citi.
The bank supports the creation of agro-industrial processing zones. Deployed in Togo and Ethiopia, there are plans to expand the concept across 15 countries.
“The AfDB has also backed the alliance formed by Côte d’Ivoire and Ghana in order to wield greater influence over the cocoa market,” the expert from Citi adds.
Sullivan also cites the $200m loan granted in June to the Ghana Cocoa Board, the country’s cocoa sector regulator, to boost cocoa productivity and the sustainability of cocoa farms. Agricultural loan guarantees, funding for agricultural research and climate change resilience initiatives round out the range of measures implemented.
However, according to observers, the AfDB lags behind in two key areas: the development of water management systems and access, particularly for women, to agricultural technology (tractors, mobile phones, drones, robots, etc.).
3 – Industry: the no. 1 missed opportunity
Despite the bank’s clear objective – to support enterprises of all sizes in Africa – and its well-defined course of action through six programmes – the results fall short of expectations and the funds spent.
Yet, the bank’s budget allocation to the “Industrialise Africa” category is the second highest ($2bn per year) after its “Improve the Quality of Life for the People of Africa” priority.
In fact, the AfDB reached its objective for kilometres of road rehabilitated in 2017, but not in 2016 or 2018.
The same is true for the number of SMEs supported, the improvement of access to financial services and the level of government revenues from investee projects.
In spite of a few success stories, such as its backing of the textile industry in West Africa and, in particular, Ethiopia, the AfDB has endured a number of setbacks, such as lines of credit granted to banks that either never arrive, do not arrive quickly enough or that charge prohibitive interest rates to recipient businesses.
In its 2019 ADER report, the institution recognised that it needs to “demonstrat[e] results in private sector operations”.
Adesina’s record is also modest in terms of joint initiatives, such as its partnership with the European Investment Bank via the Boost Africa programme.
Thus far, the AfDB has yet to successfully trigger a ripple effect boosting Africa’s industrial GDP, which has stagnated at around $600bn per year, and yet the bank hopes to see this amount double by 2025.
4 – Integration: less effective than planned
The AfDB has approached integration, a particularly sensitive issue since it is related to national sovereignty, with a two-pronged policy: building cross-border infrastructure and promoting pro-integration rhetoric.
On this first point, Adesina’s record is commendable, with major achievements, including the Nacala road corridor project which links Zambia, Malawi and Mozambique, funding for Dakar’s new airport and ambitious projects, such as the transport corridor linking East African countries to the port of Dar es Salaam.
Regarding the second point, the assessment is much more complicated. Yes, the AfDB made a $4.8m financial contribution to the African Union to back the implementation of the African Continental Free Trade Area (AfCFTA). But, aside from its lobbying efforts, its tangible contribution to the development of intra-African trade has been limited.
“By comparison, efforts by the African Export-Import Bank (Afreximbank) have been much more energetic thanks to the implementation of practical tools, like granting lines of credit to offset future losses related to the strengthening of regional integration, the launch in 2019 of a continental payment system and the organisation of an intra-African trade fair,” says economist Carlos Lopes.
5 – Social initiatives: some progress made despite assessment difficulties
In addition to strides made in the area of energy, social progress is a source of satisfaction for the bank, “even though you wouldn’t necessarily expect it to be so,” adds Lopes.
Criticised for its “catch-all” nature, the fifth High 5 priority – “Improve the Quality of Life for the People of Africa” – has nevertheless been allocated the largest share of the AfDB’s budget (more than $4bn in 2016 and $3bn in 2017 and 2018).
Although this priority is by no means its sole purview, the AfDB – whose operations include a “youth employment” component – has made tackling unemployment one of its key issues. However, the bank’s impact has been very minor: unemployment rose from 10.9% to 11.6% between 2015 and 2018 in sub-Saharan Africa.
Thanks to a certain amount of decentralisation and the alignment of its social projects with each country’s priorities, the institution has nevertheless been widely successful in leading local-level projects – strengthening connections with local authorities – synonymous with efficiency.
Besides its efforts to combat unemployment, the AfDB is also at the forefront of gender issues and women’s institutional inclusion. In 2018, women accounted for 30% of the bank’s staff and 26% of the senior management team, a rate approaching its target, set at 38% (for both groups), for 2025.