The African Development Bank @ 50

During last April, the African Development Bank Group (AfDB) announced a programme of activities marking the 50th anniversary of its creation. These will culminate in a major conference to be held in Abidjan in September. The AfDB was established as an initiative of the Organisation of African Unity in 1964. Technical work on the project was undertaken by the UN Economic Commission for Africa under the wise leadership Robert Kweku Gardiner of Ghana. The bank commenced operations in Abidjan, Côte d’Ivoire, in 1966, with an initial share capital of US$470 million. The distinguished Sudanese economist and statesman, Mamoun Beheiry, was the pioneer President of the institution.

From these rather inauspicious beginnings, the bank has seen its membership expand to 78, of which 27 are non-regionals.  The African Development Bank Group comprises three affiliates: the African Development Bank (AfDB), the African Development Fund (ADF), and the Nigeria Trust Fund (NTF). The Bank raises the bulk of its funds through capital contributions from its shareholders and also from world financial markets, leveraging on its “Triple A” rating. The ADF raises its resources mainly from capital replenishments from donor countries and through various trust funds. The NTF is a Nigerian bilateral initiative with assets currently standing at $500 million.  Bank Group financing amounts to nearly $4 billion annually in loans, equity participation and technical assistance grants. Recent capital increases have seen the bank raise its total asset base to nearly $100 billion.

Over the decades, the bank has seen its share of triumphs and upheavals. Mamoun Beheiry served a single five-year term and was succeeded by Abdelwahab Labidi of Tunisia, who was President from 1970-1976. Kwame Donkor Fordwor of Ghana served from 1976-1979.  He left under a cloud due to what was perceived as his rather ‘arrogant’ and ‘dictatorial’ style of leadership. From his memoirs, it is clear that Fordwor was not one to suffer fools gladly. And the fools never hesitated to reciprocate. A serving Vice-President, Godwin Gondwe of Malawi was brought in as a transitional caretaker during 1979-1980, paving the way for Willa Mung’Omba of Zambia who was President from1980-1985. The first two decades of the bank’s existence were the years when the institution was finding its feet and consolidating on its mandate as a multilateral finance institution. 

Babacar N’Diaye of Senegal was President from 1985-1995. He came to the role with impeccable credentials in banking and public service. He expanded the capital base of the institution and professionalized its core business practices. But his last years were riddled with accusations of nepotism and poor financial management. 

Omar Kabbaj of Morocco, a former Director of the IMF, was President during 1995—2005. Kabbaj restored the dwindling credibility of the bank. He kept the façade of a stern schoolmaster, but he was an effective leader and administrator. He welcomed accession of more non-regionals even as he responded robustly to new continental initiatives such as NEPAD and the Programme for Infrastructure Development in Africa (PIDA). Kabbaj launched the first ever strategic plan for the bank covering the years 2003—2007, of which yours sincerely was Coordinator. He launched two highly successful Replenishments for the ADF while overseeing a substantial Capital Increase. In 2003, the bank had to re-locate to Tunisia as a result of the worsening crisis in Côte d’Ivoire. As I write, the bank is finalizing the move back to its statutory headquarters in Abidjan. 

The current incumbent, Donald Kaberuka, is into his second mandate which expires in August 2015. A successful finance minister of Rwanda during the epochal post-genocide reconstruction years, Kaberuka came to the job with brilliant credentials as an economist, international civil servant and statesman. It is to his credit that the AfDB is today widely acknowledged as Africa’s premier multilateral finance and knowledge institution. His administrative decentralization has brought the institution closer to its clientele. New initiatives in water, climate change, infrastructures and private sector development have made the bank a household name throughout the continent and beyond. 

Critics, however, point out that the bank has become rather top-heavy and more bureaucratic than ever. Operating costs have are spiraling out of control. The business culture needs improving. Staff complain that the organization has become more “political”.  There is a general feeling that the interests of the non-regioanls have priority over those of Africa. This view has been so influential in certain circles to the extent that the late Muammar Gaddafi of Libya mooted the idea of a rival African Investment Bank to be headquartered in Tripoli. And he had the capital to underwrite that ambition. 

In spite of these criticisms, I believe Donald Kaberuka has been the greatest President of the African Development Bank Group. 

As the curtain closes on an era, the African Development Bank is in dire need of rejuvenation, building on the foundations that have been laid by her illustrious epigones. Internal reforms are imperative, including rationalization of the administrative structure and improvement in work processes. 

There will soon be jostling for the headship of the organization. I believe the time has come for Nigeria to present a serious candidate to succeed Donald Kaberuka. That person should be an economist of high of stature and of proven experience – a person of high integrity and competence. 

If Americans insist that the Presidency of the World Bank is theirs by right, Nigerians must also claim same for the AfDB. Nigeria is Africa’s biggest economy. We have financially underwritten many of our continent’s institutions. It is unacceptable that, Nigeria, with 10% of the voting powers, has never had one of its nationals as head of the bank. In the 1970s, Gamaliel Onosode, the brilliant classicist and guru of Nigerian boardrooms, was touted as a possible candidate, but he himself was not interested. In 2005, Olabisi Ogunjobi, a seasoned former Vice-President of the bank, was put forward. He lost to Donald Kaberuka, who was, in all honesty, the best candidate. 

This time is different. If not now, when; and if not us, who?

OBADIAH MAILAFIA