Governance and financial reform are key – Jaloul Ayed

Jaloul Ayed is a candidate for the presidency of the African Development Bank. A highly respected international banker and a former Tunisian minister of finance, he is also an entrepreneur and academic. He talked with Stephen Williams about his vision for the Bank and Africa.

Following the Tunisia’s ‘Jasmin revolution’, Jaloul Ayed returned to his native Tunisia to lend a hand to reconstructing the country in the post-Ben Ali period. Becoming the Minister of Finance in January 2011, he set about preparing a five-year ‘Jasmin Plan’ , submitted to the G8 as part of the Deauville Partnership Agreement.

On his return to Tunisia, Ayed brought with him many years of commercial banking experience having joined the Moroccan BMCE Group (where he was responsible for creating the BMCE Capital investment banking arm and BMCE International in London, UK) and as president of the executive committee of the BMCE Group, led a bold expansion strategy into sub-Saharan Africa, well before it became fashionable and when many of the bigger French banking groups were retreating from the continent. BMCE now has a presence in 22 countries.

When asked whether he considered his extensive banking experience an advantage in his bid to lead the AfDB, he was almost reluctant in his response.

“I have to be mindful, and respectful, of the other candidates. I think, we all have equal chances, but I do bring something different to the table.

“The fact that I managed a bank, and a large bank, or banks actually, is an advantage because the African Development Bank is a bank – it’s not an industry or government administration.

“Historically, the AfDB has never been managed by a banker – so I feel I will bring something different. And the fact that you can have a banker who spent 30 years of his life managing financial institutions is a definite advantage.

Ayed played a significant role in developing the capital markets in Morocco, building it from the ground up. He stresses the importance of dynamic local capital markets to drive investment in the continent.

Ayed also felt it was useful that he comes from outside the AfDB and could bring a different perspective as to how the bank operates and what it can do.

“At a time when the bank has to re-elevate itself, seizing the opportunity that Africa offers today, and pushing the continent through to the next stage of development, placing Africa as the next solid emerging market in the world, you need to explore new innovative ideas and you need to put the bank at the centre of economic circles.  I want the bank to be involved in commercial circles, in the business circles of the world and I want the bank to be the conduit of anybody who is interested in Africa.”

When asked about the Bank’s 10-year strategy, overall he was in agreement with the priority areas the bank had targeted, although he would put a stronger emphasis on governance and financial reforms. “I believe governance is the first step towards achieving sustainable development. Good governance is conducive to private sector development and financial stability.

“Of course other areas are very important because if you don’t have infrastructure you cannot achieve regional integration and that is a vision that’s been around since the inception of the AU and the AfDB.”

Ayed, coming himself from the private sector, believes that private enterprise will have to be at the forefront of everything the Bank does. “Public sector investment is critical and the Bank needs to be actively involved in large infrastructure projects, but everything we do needs to be done with the objective of helping the private sector lift off.

And that is why I would put a big emphasis on helping drive financial reform. The private sector cannot thrive without a dynamic financial services industry.”

It is clear that Ayed is hugely supportive of the AfDB vision and its achievements to date. “I think today it is established that, by-and-large, it is the most important development institution in Africa and one that has made tremendous progress.

“No one has the kind of experience, knowledge and expertise of the AfDB. It has contributed to a large extent to the economic momentum that we have seen in Africa over the last decade, and in my view it’s a very solid institution. And I believe we can build on that so that it can continue to play a very important role in the development of Africa.”

When asked about the Bank’s Triple A credit rating, Ayed stressed that he would do everything in his power to ensure the bank maintained this rating. He felt the Bank had strong liquidity although he felt that the portfolio in terms of its concentration could be re-evaluated.

Ayed stressed the importance of doing things differently and creating new mechanisms or developing new instruments and new financial solutions to drive development. “There are many ways to leverage smartly, without taking undue risk, on the bank’s assets and borrowing capabilities. For example, In Tunisia we helped create create equity markets through a fund of funds to support SMEs.”

Did Ayed see any cause for concern when it comes to Africa’s future with falling commodity and oil prices, slowing economic growth in some key markets, and the rising threat of insecurity? He is both positive and pragmatic. “In Africa today, some countries have the best debt to GDP ratios in the world, so that is all good news. That’s not to say that the continent is out of the woods, but what I’m saying is that the momentum that we have seen in many parts of Africa bodes well for the future of the continent. Sooner or later, that will have a spill over effect on other countries.”

Ayed’s interests lie beyond banking. He is a pianist and musical composer. One if his compositions will be played at the Carnegie Hall in New York later this month and culture is obviously dear to him: “One of the intiatives I’d like to launch at the AfDB is the importance of culture in sustainable development. We concentrate on physical things but we forget that culture is neglected when it is an important driver of sustainable development.”