How Senegalese economist Makhtar Diop landed IFC’s top job

By Aurélie M'Bida

Posted on Wednesday, 31 March 2021 11:16
Makhtar Diop, the new head of IFC. Here in Paris in December 2015. Bruno Levy for J.A.

At the age of 60, Senegalese economist Makhtar Diop is taking over as head of the International Finance Corporation (IFC, World Bank Group). This achievement is the result of a lot of hard work and perseverance.

“Right choice, right time.” This simple tweet – written by Donald Kaberuka, a former president of the African Development Bank (AfDB) – particularly touched its recipient. It was just one of many other expressions of support that appeared on social media on 18 February.

On that day, Senegalese economist Makhtar Diop was officially introduced as the new managing director and vice-president of IFC – the World Bank’s private sector arm. He is the first African to head the IFC, which is the world’s largest international development institution.

A long process

After a long recruitment process (around 100 applications), the 60-year-old economist was chosen to replace Philippe Le Houérou as of 1 March 2021. The announcement of Le Houérou’s departure in June 2020 unleashed a ‘Who’s Who’ list of favourable candidates in Washington and in African capitals.

The list included Cameroonian economist Vera Songwe and Ivorian minister Thierry Tanoh, both former IFC staff, as well as Franco-Ivorian finance titan Tidjane Thiam.

Thiam would eventually sit on the ad hoc selection committee in charge of finding the ideal candidate, made up of six people from the Bretton Woods institution and chaired by Mari Pangestu.

It was a long process, impeded by the constraints of the ongoing health crisis, that concluded on 17 February when Diop’s candidacy was validated by the institution’s board.

On that date, the selection committee presented its short list to David Malpass, president of the World Bank Group. Malpass then had to choose amongst three candidates, all of whom were African.

Battle of the big boys

The names on that short list were Diop’s, former Togolese prime minister (2008-2012) Gilbert Houngbo – who was finally re-elected to head the International Fund for Agricultural Development (IFAD) in mid-February – and Leslie Maasdorp, deputy chairman and CFO of the New Development Bank (NDB).

Maasdorp also worked for Bank of America Merrill Lynch and Barclays, among others, and was deputy CEO of the Department of Public Enterprises in the South African Department of Labour during the privatisation wave of the late 1990s.

Malpass chose Diop and put his decision to a vote. The rest is history.

Stars coming into alignment

But why did the profile of the former Senegalese minister of the economy and finance (2000-2001), a herald of the World Bank, outshine the others? Part of the answer lies in the question and the rest is due to an alignment of the stars, making the son of a lawyer and a midwife from Saint-Louis the natural choice.

“With his academic background and professional achievements, Makhtar had more than enough experience for the position,” says Ibrahim Sagna, Afreximbank’s global head of advisory and capital markets.

Sagna praised his compatriot’s work ethic, with whom he had worked closely at the International Monetary Fund (IMF) in 1997 when Alassane Ouattara was the institution’s deputy managing director.

“Makhtar Diop is a leader who has always achieved results,” says Sagna, remembering that he had been an “already exceptional” person back then.

Although favoured, he gave up on the AfDB

In Washington, Diop – who is viewed as a moderate liberal as well as a strong supporter of good governance, and who became the first French-speaking African to be appointed vice-president of the World Bank in charge of Africa in 2012 – is highly respected.

These same assets helped make Diop a favourite for the AfDB presidency in 2014, at the end of Kaberuka’s second term. At the time, the Senegalese economist was strongly supported.

However, it was not to be. In mid-October 2014, against all odds, Diop withdrew his candidacy and Akinwumi Adesina was elected a few months later.

Refuting the controversies of the time, Diop’s entourage still asserts today that he withdrew due to “personal reasons” back in 2014. The economist has continued on his way without feeling the slightest bitterness, let alone any ideas of revenge.

This episode, however, allowed Diop to consolidate his CV and his experience within the World Bank Group to the point of heading its main subsidiary devoted to private investment in developing countries. “He started his career in the private sector, so it was in his DNA,” says a close friend.

The World Bank’s largest portfolio

After graduating in economics from the Universities of Warwick and Nottingham in England and in finance from the Ecole Supérieure des Sciences Commerciales Appliquées (ESLSCA) in France, Diop began his career in the banking sector. He joined the IMF in 1997 and joined the Senegalese government three years later as minister of economy and finance.

At the end of 2001, he joined the World Bank, a group that he never left, or almost never left. Diop’s six years as head of the World Bank’s Sub-Saharan Africa region were particularly noteworthy, as he oversaw a record-breaking $70bn in commitments.

In this position, he worked to mobilise private finance for infrastructure in Africa, fostered innovation ecosystems and accelerated the adoption of new technologies. He is an expert on renewable energy and has promoted investing in it as well as regional interconnectivity in the energy and transport sectors.

On the strength of this record, Jim Yong Kim, then president of the World Bank, appointed him as head of its new Infrastructure Department (previously part of the Sustainable Development portfolio) in 2018.

Diop added new strings to his bow as he became not only in charge of the transport, digital economy and energy sectors, but also of infrastructure financing and public-private partnerships.

Indispensable at the start of the pandemic

In the end, its scope (energy, transport, digital & telecoms) represents 31% of the World Bank’s net commitment portfolio. It is the largest portfolio at multilateral institution. Diop got closer to the eyes and ears of Yong Kim, and then of Malpass, who succeeded him in January 2019. Furthermore, he became indispensable once the pandemic broke out.

“The Covid-19 crisis has put the emphasis on digital, that’s for sure,” he said last December. He also recalls that the World Bank signed an action plan in response to the crisis in April 2020 with the World Economic Forum (WEF), the Global System for Mobile Communications (GSMA) and the International Telecommunication Union (ITU), which aims to ensure worldwide access to the equivalent of 4G by 2030.

Digital is one of the World Bank’s current focus areas, along with vaccine transport and logistics. Diop had been working on these issues for several months before being selected by the IFC.

Malpass did not fail to point this out on 18 February. “His skills will help the World Bank Group respond quickly to the global crisis and help ensure a green, resilient and inclusive recovery.” The circle is complete.

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