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AfDB wars: Targeting African man or the continental lender?


African Development Bank President Akinwumi Adesina addresses a press conference in the past. PHOTO | AFP

Akinwumi Adesina was probably more known for working with rural agricultural communities than scandal. Now, as president of the African Development Bank (AfDB), he may be punch ball of a global political agenda pitting the US against African leaders, and maybe China.

Since last month, Dr Adesina has been fighting allegations of inappropriate acts that could personally ruin his career and roil a near-certain unopposed re-election this August. But his stay, or going, could punctuate relations between Africa and the US.

Observers have told the Business Daily the impasse over the credibility of the bank’s president could ruin more than his career.

“The leadership crisis at the AfDB is too important to ignore, especially at this time when the lender is raising funds to shore up its capital base for onward lending to African countries, many of which are battling debt crisis and the Corona pandemic,” Peter Mwencha, a specialist in international political economy and CEO of the International Relations Society of Kenya, said, referring to the bank’s bid to raise more than $100 billion from shareholders.

“From a geopolitical perspective, this issue has brought up concerns about allowing foreigners an outsized stake in African affairs. Africans are questioning why foreigners should have such a huge influence in such an important African institution,” he added, but challenged African leaders to consider raising their shareholding in the bank.

As Agriculture minister in Nigeria, Dr Adesina was named Forbes Person of the Year in 2013, for ‘revolutionising’ agricultural policies in his country.

There had been no scandal against him since he took over as president of AfDB in 2015. In fact, he has led the institution, formed in 1964, on a campaign to steer clear of fossil fuel projects, dumping all dirty coal-related funding and instead focusing on powering rural homes using renewable energy.

That was until January when anonymous employees of the bank wrote to some directors, alleging Dr Adesina had awarded contracts to his cronies and relatives as well as using the position to enhance his personal stature.

When more allegations, anonymously, emerged in April about how he had paid employees who resigned mysteriously, the AfDB board endorsed an internal audit. That committee returned a report suggesting there had been no evidence linking Dr Adesina to the allegations.

But the US government was not satisfied, so Treasury Secretary Steve Mnuchin wrote a letter rejecting the results of the internal audit. He argued the dismissal of all allegations against Dr Adesina will “tarnish the reputation of the institution,” according to a May 28 letter to the AfDB board.

“The United States,” Mnuchin wrote last week, “cannot support dismissing the allegations at this stage.”

One employee of the bank, who wished to remain anonymous told the Business Daily the bank has witnessed high-profile resignations in the past five years while the officials were paid handsome severance packages suspected to buy their silence.

Dr Adesina denies any wrong doing.

But the US stance, to have Dr Adesina re-investigated, has seen African leaders, including Nigeria, where he comes from, rally behind him.

Ex-Nigerian President Olusegun Obasanjo rallied more than a dozen other former leaders to endorse an open letter to Washington, warning the stance would divert the bank’s attention to the Covid-19 pandemic.

“At this critical time that Africa is battling with Covid-19, the Bank and its President should not be distracted,” Obasanjo argued in a letter that was also signed by Jakaya Kikwete, Goodluck Jonathan, Joachim Chissano, Ellen-Johnson Sirleaf, Joyce Banda, Tandja Mamadou and several other leaders.

“All shareholders should work with mutual respect, and honour the rules and procedures of the Bank and its governance systems that have served it well for 55 years. No nation, regardless of how powerful, has a veto power over the African Development Bank, and no nation should have such power.”

While the leaders urged respect for protocol, they raised a pan-African issue, indicating the Bank was the most important institution on the continent and that it was “the pride of Africa.

All African countries are members of the Bank, but it also has 27 members from countries outside the continent. It however, lends exclusively to Africa.

Nigeria and the US are the biggest shareholders in the AfDB. The two countries command a 15 per cent share combined, but Nigeria has 9.1 per cent in the institution.

Other biggest shareholders include Egypt (5.5 per cent), Japan (5.4 per cent), South Africa, Algeria and Germany. None of the African countries has so far sided with the US, although the UK, Netherlands, Denmark, Austria, Switzerland, Norway, and Sweden have sided with the US.

In the wake of the Covid-19 pandemic, the Bank announced a $10 billion (Sh1 trillion) emergency response kitty for African countries in distress as well as issued a $3 billion social bond.

The Board also agreed to have the Bank raise capital from member states by $115 billion, nearly twice its capital base, and the largest such move since it was created. African leaders see Washington stance as arrogant and in bad taste even though it calls into question the quality of governance of the institution.

The timing, so soon after the US President criticised the WHO Director General, Dr Tedros Adhanom from Ethiopia, has seen leaders worked up.

Last week, African Union chairperson Cyril Ramaphosa led an online campaign to back the AfDB chief.

With rising debt against China, which has been Africa’s main lender for projects, AfDB has become an institution of influence in Africa. “Powerful countries within and outside the continent are jostling to gain influence in the institution,” Dr Mwencha told Business Daily.

“With the AfDB board divided on the matter, it is therefore critical that a solution is found expeditiously so that it's operations are not impacted. It is also perhaps time to review the AfDB's institutional architecture and governance systems so as to put in place proper checks and balances.”