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Controversy and Challenged for the African Development Bank

22 October 2020 Comments (0) Featured, Politics

In recent years, many African countries and organizations have worked hard to move away from the veil of corruption that has shrouded the continent for decades. Exploitative systems left in place by former colonial governments have often been marked by nepotism and misuse of power. 

The most recent ‘scandal’ has just resulted in Dr Akinwumi Adesina being cleared of all allegations and also re-elected as President of the African Development Bank (AfDB) for a new five-year term.

Who is Akinwumi Adesina?

Dr Akinwumi “Akin” Adesina is a 60-year-old Nigerian who previously served as Nigeria’s Minister of Agriculture and Rural Development from 2010 until 2015. Prior to that, he was Vice President of Policy and Partnerships for AGRA (Alliance for a Green Revolution in Africa).

From a farming family, Adesina was educated in Nigeria (where he was the first student at his university to be awarded a First Class Honours) and then at Purdue University in Indiana, USA, where he won an award for his PhD thesis. 

He then went on to work as a senior economist at WARDA (West African Rice Development Association) as well as continuing to work for the Rockefeller Foundation who he had joined in 1988. He served as the foundation’s representative for the southern African region from 1999 until 2003 and then as associate director for food security from 2003 to 2008. 

Adesina has been recognized for the work he has done in agriculture on several occasions. He was named Forbes’ African man of the Year in 2013 for his work in reforming the Nigerian agricultural sector. And in 2010, then UN Secretary-General, Ban Ki-moon, appointed him as one of 17 leaders to spearhead the UN’s Millennium Development Goals.

His record at the AfDB has been impressive. It is the only African financial institution with a Triple-A credit rating, and in October of 2019, they raised $115 billion in fresh capital, an achievement many ascribed to Adesina. 

Controversy

The corruption came from AfDB staff who alleged that Adesina had committed multiple breaches of trust and of abusing his position as well as breaching the bank’s own code of ethics. An initial 15-page report accused him of embezzlement, nepotism towards fellow Nigerians, awarding lucrative contracts to friends and families, and promoting people who were suspected of fraudulent activities. 

An internal inquiry cleared him of all allegations but this was rejected by the U.S.A., who are one of the AfDB’s 27 non-regional members as well as being the second largest shareholder in the bank behind Nigeria. 

This prompted the bank’s Bureau of Governors to set up a three-person review panel, headed by Mary Robinson, former President of Ireland. They were given a short four-week window to investigate and deliver their findings so as not to interfere with the approaching election for President of AfDB, an election Adesina had been expected to win unopposed until these allegations surfaced.

The review panel agreed with the original internal inquiry’s findings, stating: “…concurs with the (Ethics) Committee in its findings in respect of all the allegations against the President and finds that they were properly considered and dismissed by the Committee.”

Moving Forward

On 27th August, 2020, Adesina was re-elected for another five –year term as president of AfDB with 100% of the votes from both regional and non-regional members. 

The challenge for Adesina now is to put this controversy behind him and focus on the challenges facing the AfDB, especially in the current uncertainty of Covid 19. His first term focused on what the bank called their ‘High 5s’ priorities: Powering Africa, Feeding Africa, Industrializing Africa, Integrating Africa, and Improving the lives of Africans. 

That first term saw a lot of success which included 18 million receiving electricity supplies, 141 million benefiting from better agricultural technology, and 60 million getting access to better water supplies and sanitation. The bank has also seen its general capital reach its highest level ever, growing to $208 billion from $93 billion. 

With the independent panel exonerating him, and with the unanimous vote for his re-election, Dr Adesina can hopefully put these allegations to bed and continue to improve the lives of millions of Africans, 

Photos : Foreignpolicy.com / Afdb.org / africanleadershipmagazine.co.uk/ ft.com

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Development bank: ‘High 5’s’ will drive African economic growth

31 March 2016 Comments (0) Africa, Business, Featured

Powering and industrializing the economy of Africa are among key priorities outlined in March by the new head of the African Development Bank.

Akinwumi Adesina, president of the bank since September, told about 500 business leaders from 43 countries at the fourth Africa CEO Forum in Abidjan that the continent will rely on private investment as it seeks to advance on “the value chain” from being a source of raw materials to becoming a manufacturing economy.

Adesina said the African Development Bank will focus on five key priorities as it seeks to improve the business climate and quality of life on the continent.

The priorities, which Adesina dubbed the “High 5’s,” are:

  1. Light up and power Africa

This priority is critical to the development of a manufacturing economy, the bank president said.

He noted that more than 645 million Africans do not electricity while energy bottlenecks power shortages cost Africa about two to four percent of gross national product each year, undermining economic growth and job creation.

He said the African Development Bank has launched a program New Deal on Energy for Africa that has investment commitments of $12 billion over the next five years, in addition to public and private partnerships worth about $50 billion.

  1. Feed Africa

With two-thirds of the world’s uncultivated arable land and more than 60 percent of its population involved in agriculture, Africa could become a powerhouse in providing food to the world, Adesina said.

Nevertheless, many on the continent suffer from malnutrition and African nations are forced to import food at a high cost, some $35 billion annually.

Adesina said African leaders must change their strategy from thinking about agriculture as a way of managing poverty to treating it like a business to generate wealth and diversify economies.

  1. Industrialize Africa

In sub-Saharan Africa, manufacturing accounts for only 11 percent of economic output on the continent and less than two percent of global output.

However, without infrastructure, power, and a supportive business environment, Africa will continue to import manufactured goods that might otherwise be made in Africa, Adesina said.

  1. Integrate Africa

Adesina said the fragmentation of African economies is holding back progress and integration will be critical to driving industrialization.

He called on African governments to implement regional and inter-regional agreements that would remove barriers to integration.

He said the African Development Bank would continue to invest in regional infrastructure and work with regional partners to facilitate integration of trade and transport.

  1. Improve the quality of life for Africans

Adesina said the bank will accelerate its investments in vocational training and education to help drive economic development.

The centerpiece of this effort is the “Jobs for Africa’s Youth Initiative,” a partnership of the development bank, the United Nations Economic Commission for Africa and the African Union.

Adesina said the goal of the initiative goal is to reach 50 million young people and create 25 million jobs in the coming decade, to enable young Africans to “realize their economic potential through business incubation and financing.”

Private sector critical to growth

He said the private sector, which accounts for 90 percent of African jobs, must play a major role in the youth education initiative and in the overall development of the economy.

The private sector, he said, accounts for 90 percent of employment on the continent, 80 percent of production and two-third of investments.

He said the bank’s effort to support private enterprise includes investment in private projects. In 2015, the development bank approved private sector projects at a cost of $2.4 million out of a total of $9 billion.

Adesina said the continent is poised for growth in spite of challenges to the global economy and, in Africa, declines in commodity prices and in demand from China.

He said economic growth on the continent will outpace global growth. The global economy is projected to grow by three percent in 2016 while the predicted growth rate for Africa is 4.4 percent this year and five percent in 2017, he said.

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New African Development Bank leader puts energy at the forefront

12 January 2016 Comments (1) Africa, Featured, Leaders

Akinwumi Adesina

The new head of the African Development Bank says his top priority is to develop the continent’s energy infrastructure to spur economic growth.

Akinwumi Adesina, known for his reforms and anti-corruption efforts as Minister of Agriculture and Rural Development of Nigeria, became president of the bank on September 1, 2015. The bank is one of Africa’s largest lending institutions and finances projects to improve electricity, water and transportation.

“My top priority will be to focus the Bank to deliver on “power-for-all” – a universal access to electricity for Africa. Nothing is more important to Africa than access to power,” Adesina said in his vision statement for his candidacy for president.

Lack of energy slows development

Adesina said lack of energy is the greatest obstacle to the development of the continent.

“The development of the energy infrastructure for Africa will drive more rapid economic and social development of the continent, by reducing the cost of doing business, powering industrial growth, unlocking entrepreneurship of millions of small and medium size enterprises, improving educational and health systems and deepening financial services, driving agro processing to create jobs,” he said.

He noted that Africa’s total energy capacity is only 147 GW – similar to that of Belgium. He wants to expand that to 700 GW by 2040 with development of renewable resources.

“Africa has 50% of the world’s renewable energy (wind, hydropower and solar) but they remain largely untapped,” he said.

Plans to fund large and small projects

He proposes a mix of large, regional projects and smaller local ones that can be developed quickly.

“The Bank cannot afford to put all its focus on large regional power projects alone, as they are very complex, have high capital exposure and risk profiles, will take time to achieve, even though they are critical,” he said.

“Under my leadership, the Bank will pursue a twin track approach: build success in the short term, deliver successful investments in power and then scale up based on success. To show quick successes, build momentum on execution and delivery for countries, the Bank will also focus on providing support for the piloting of decentralized integrated power systems within countries.”

Corruption is an obstacle

Another obstacle, he said, is corruption.

“The cost of corruption is massive; it turns the whole continent into darkness,” he said, estimating that corruption costs Africa $148 billion a year.

Africa looks to reduce carbon emissions

Adesina was a prominent voice for a unified African agenda at the recent Climate Conference in Paris and that agenda also stressed development of renewable energy sources in order to reduce greenhouse emissions.

At the time, he said Africa needs an international investment of $55 billion a year through 2030 to create an efficient energy sector that uses more renewable resources. He said the bank would contribute $5 billion in financing, 40 percent of its total investments.

Increased investment in private sector

In addition to pledging to make investments in the energy infrastructure, Adesina said the bank would increase its investments in the private sector.

He said private sector lending by the bank was $2.1 billion in 2013.

“Given that the private sector accounts for 70% of all investments in Africa, 70% of all output and 90% of all employment, there is need for the Bank to be more expansive in its private sector operations,” he said.

Adesina also said the bank will embrace an “activist” posture in support of infrastructure developments.

“The Bank will increasingly take on a transactional approach by helping countries and the private sector to resolve legal and regulatory environments that will unlock bottlenecks to project development and execution. The role of the Bank will be more of an “activist financier” that will be more engaged in driving the execution of infrastructure projects, not just ideas and master plans,” he said.

Known for agricultural reform in Nigeria

Adesina is a respected economist and agricultural expert.

Before joining the bank, he had been Minister of Agriculture and Rural Development in Nigeria since 2011. He was known for implementing bold reforms in the country’s agricultural sector, including anti-corruption efforts and infrastructure improvements. Agriculture had been long neglected as the West African country’s reliance on oil revenues grew.

During his tenure, domestic food production increased by 22 million tons while food imports decreased significantly.

In 2013, Adesina won the Forbes Africa Person of the Year award for his reforms in Nigeria’s agriculture sector. In 2014, he was selected as Anti-corruption Man of the Year and Most Transparent and Accountable Minister of the Federal Republic of Nigeria by the Foundation for Transparency and Accountability.

He holds a master’s degree and a PhD in agricultural economics from Purdue University.

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