I was privileged to have been invited as an observer at the recently concluded African Development Bank (AfDB) Annual Meeting which took place in Abidjan from 25-29 May. It was lovely to be back in Abidjan where I had lived for several years as a staffer of the AfDB. After years of devastating crisis, the city is returning to the cosmopolis that it once was. Credit must go to President Alassane Ouattara who has managed the economy with prudence and sagacity, leveraging on his moral capital and goodwill as a former top IMF chieftain and renowned economist.
I was one of those who criticized him and the Forces nouvelles, military contraption that was devised by the godless and ignoble French to advance their project of invisible empire, in connivance with the disgraced Blaise Compaore, former strongman of Burkina Faso. Former Ivoirian President Laurent Gbagbo was not by any means a competent leader, but the international conspiracy that brought Ouattara to power can never be washed away under the carpet. Some of his entourage, I will continue to insist, ought to be in The Hague to answer for their crimes as Gbagbo and his acolytes currently are. But that is a story for another day.
The Annual Meeting was a well-attended affair, perhaps because it was also the occasion of the 50th anniversary of the bank and occasion for the election of the successor to Donald Kaberuka of Rwanda. It was a glamorous, if rather chaotic, affair. Beyond the launching of the flagship African Economic Outlook, there were lots of sound-bites and all sorts of development speak that meant little or nothing. For me, the most interesting aspect was the networking. If you wanted to meet many of the movers and shakers of African finance, Abidjan was the place to be.
As usual, there were intrigues in the corridors of the plush Sofitel Ivoire Hotel, the venue of the meeting. Much had to do with the election of the new president, as various constituencies lobbied for their respective candidates.
I had rather mixed feelings about the process itself. The AfDB is the only regional finance institution where non-regional members have a major say in who heads the organization. For the World Bank, we all know that the Americans have continued to insist that it is their exclusive preserve. The Japanese have held on to the headship of the Asian Development Bank. Our own AfDB is one of the few where foreigners have as much right as ourselves to decide who should head the bank.
There were eight candidates in all: our own Akinwunmi Adesina, outgoing Minister of Agriculture and Rural Development; Sufian Ahmed, the highly respected Minister of Finance of Ethiopia; Tunisian Finance Minister Jaloul Ayed; Cape Verdian Minister of Finance Christian Duarte, the only woman in the pack; Sierra Leone’s Foreign Affairs Minister Samura Kamara; Chadian Finance Minister Kordje Bedoumra; Islamic Development Bank Vice-President Birama Boubacar Sidibe; and recently retired AfDB Vice-President Thomas Zondo Sakala of Zimbabwe.
After two rounds of voting on Thursday 28th, Adesina clinched the prize with 58 percent of the votes, followed by Kordje Bedoumra with 32 percent and Christina Duarte with 10 percent. Adesina was a bit of an oddball among the pack, given that, stricto sensu, he does not come from a finance background. He is an agricultural economist who has worked mostly in international development. We all agree that he has acquitted himself rather well as agriculture minister.
Once again, it was clear that the Governing Board was not favourably disposed to appointing insiders to the highly exalted role. Kordje Bedoumra, Zondo Sakala and Birama Sidibe were all former bank staffers. Kordje Bedoumra was a highly accomplished VP for Infrastructures; a cool-headed and highly effective technocrat.
There were also other good candidates who were as good as Adesina. Jaloul Ayed of Tunisia has been a successful former finance minister who is also CEO of one of the leading commercial banks in Tunisia. Something of a renaissance man, he is a concert pianist who plays at professional level. What may have counted against him is the fact that the bank just moved from its temporary offices in Tunis in September 2014 after 11 years and given also that a Tunisian has held the AfDB top post before, in the person of Abdelwahab Labidi (1970-76).
Sufian Ahmed of Ethiopia was another outstanding candidate. He has been the prime architect of Ethiopia’s economic success in the last decade; reputed for his focus, effectiveness, leadership and asceticism.
Many people I spoke with during the Annual Meeting conceded that Akinwunmi Adesina won the presidency on merit. He stood out by his intellectual brilliance, impeccable record as an international civil servant and astuteness as a statesman and one of the best ministers in the outgoing Goodluck Jonathan administration. While we believe that Adesina will give his ultimate loyalty to the AfDB and to Africa, we cannot avoid facing the fact that his victory has been a redeeming grace for Nigeria’s dwindling influence in African and world affairs.
In May 2005 my big brother Bisi Ogunjobi lost the presidency to Donald Kaberuka in, of all places, Abuja. We had wined and dined the entire Annual Meetings on the inimitable Nigerian hospitality. And yet we lost on the home-ground. It was a painful and embarrassing ordeal.
For much of its independent existence, Nigeria has been a major contributor to the financing of multilateral institutions. Within the African context, Nigeria has been a major contributor and/or dominant shareholder of such institutions as the African Development Bank Group, Shelter Afrique, Afrexim Bank, and the ECOWAS Bank for Investment and Development (EBID).
In most African regional institutions in which Nigeria has been involved, she has contributed as much as 40 percent to the operational costs of those institutions. During the early nineties the
Nigerian government underwrote a significant portion of the operational budget of the OAU/AU, at a time of fiscal difficulties when most member countries were not forthcoming.
Nigeria was one of the prime movers for the creation of the African Development Bank. At the inception of the African Development Bank in 1964, with an initial share capital of UA 250 million (US$470 million) by the 25 member countries, Nigeria was the third-largest shareholder, following behind Egypt and Algeria. Egypt had the largest initial subscription of UA 30 million and a voting power of 10.1 percent, followed by Algeria with a contribution of UA 24.50 million with a voting power of 8.60 percent. Nigeria came third with an initial subscription of UA 24.10 million and a voting a power of 8.49 percent.
These initial subscriptions followed the laid-down allocation formula that was determined on the basis of population and gross national product at the time. In 1982, when President Boubacar Ndiaye opened up participation to non-regional member countries, the share capital increased from UA 250 million to UA 21.9 billion (equivalent to US$30.7 billion by 1998). This expansion increased the share participation of non-regionals from 33.3 percent to 40 percent, with the proportion of the voting powers of the regional member countries having reduced from 66.6 percent to 60 percent. Today, the AfDB has a total capitalisation of US$100 billion.
With Nigeria’s growing influence in international economic relations, thanks to increased petroleum resources, the government was able to significantly increase its share ownership. As at year-end 2005, Nigeria’s subscriptions stood at UA 300 million, representing a voting power of 9.2 percent, the largest single shareholding in the organisation.
The Nigeria Trust Fund (NTF) is a special AfDB fund created in 1976 by agreement between the African Development Bank Group and the Federal Government of Nigeria. Its objective is to assist the development efforts of the bank’s low-income regional member countries whose economic and social conditions and prospects require concessional financing. With assets of about US$500 million, the NTF lends at a 4 percent interest rate with a 25-year repayment period, including a five-year grace period.
The Nigerian Technical Cooperation Fund (NTCF) was developed in April 2004 as a grant window to complement the resources of the NTF, consisting of some US$25 million drawn from the net income of the NTF. Its objectives are to pool the human capital of recipient countries and from the African Diaspora to assist in the rebuilding of war-torn countries. The NTCF provides technical assistance grants for the identification and preparation of bankable projects. The bulk of resources are used to finance procurement of consultancy services, of which 80 percent shall come from Nigeria while the remainder 20 percent from other African regional member countries.
From the lessons of experience, countries that contribute to the shareholdings of multilateral banks do so for both reasons of altruism as well as national self-interest. Given that these institutions wield enormous influence in national development policies of recipient countries, donor countries often tend to jealously guard their voting powers as a means of exerting policy influence in those institutions, and via those institutions, on regional member countries.
The experience in practice has been that Nigeria has never really exercised any influence commensurate with its status and voting power. Nigerian influence remains weak at the highest levels of management while Nigerian staff have had occasion to feel that they have not been given their due when it comes to promotion within the professional ranks. From my recollections, there was always a tinge of virulent, residual Nigeriaphobia among large sections of the organisation, for reasons I could never truly fathom.
With the recent rebasing of Nigeria’s GDP calculations, our country is the largest economy on the continent. Nigeria has acquitted itself with honour as the leader of the African continent throughout the decades. We were the leader of the Frontline States during the era of decolonisation and the fight against Apartheid and racist minority regimes in Southern Africa. We were the prime movers of ECOWAS and were the primary financiers of the African Union and other regional bodies. We are, of course, the largest shareholder in the AfDB. At the same time, there is a strong feeling that our influence is waning on the continent and in the world at large.
This situation must be reversed. We must reassert our role and influence in Africa. Although there was a gentleman’s agreement that the major contributors to the African Union – Nigeria, South Africa, Algeria, Egypt and Libya – should not seek the presidency of the AU Commission, South Africa fought to clinch that position. As far as we are concerned, the gentleman’s agreement therefore no longer exists. If South Africa, the second-largest economy on the continent, holds the presidency of the Commission, we are in a strong moral as well as political position in insisting that the presidency of the African Development Bank should come to us this time around. Nigeria is the largest shareholder of that institution. Just as the Americans insist on keeping the presidency of the World Bank and the Japanese that of the Asian Development Bank, Nigeria has a moral as well as diplomatic entitlement to the presidency of the African Development Bank Group.
The AfDB is the largest financial institution on the continent. The CEO of that institution is easily the most influential banker on the continent.
The African Development Bank stands at a critical juncture in its fifty-year history. Many of its stakeholders have felt it has become a massive, top-heavy bureaucratic behemoth that is losing touch with its critical clientele. There is no doubt that the organisation has done some things right, but it is very clear that it has also manifested key weaknesses in several critical sectors.
Now is the time to reposition the AfDB to make it a lean organisation that can be a catalyst for the much-vaunted African Renaissance. This is a call for bold leadership, for reform and for courage in repositioning the AfDB so that it can serve the interests of all its shareholders.
What is needed is not undue radicalism but boldness, courage and intellectual originality. We should seek a modus vivendi between the regional and non-regional members, mobilise additional resources and ensure that the organisation remains an authentic African organisation that is world-class in excellence and professionalism. Akinwunmi Adesina has what it takes to take the bank to the next level. He will need our support and prayers.
Obadiah Mailafia
