Akinwumi Adesina has been re-elected as president of the African Development Bank at the Bank’s 2020 Annual Meetings. The meetings, which took place virtually due to restrictions caused by coronavirus, also focused on how to build Africa back better after Covid-19.
Nigeria’s Akinwumi Adesina has been re-elected to serve a second five-year term as president of the African Development Bank (AfDB). He received 100% of votes of all regional and non-regional members at the Bank’s 2020 Annual Meetings, which took place virtually due to restrictions caused by the coronavirus pandemic.
Addressing shareholders online to make his case for re-election, Adesina said: “Five years ago, right here in Abidjan, you elected me president of the African Development Bank. It was a huge responsibility to shoulder. I promised that I would work tirelessly to accelerate Africa’s development. My vision, focused on the High 5 priorities, was my commitment, my promise, my compass.”
The objectives of the High 5s agenda were to: Light up and Power Africa; Feed Africa; Industrialise Africa; Integrate Africa; and Improve the Quality of Life for the People of Africa.
Adesina said that in the five years of his presidency, 18m additional people in Africa had gained access to electricity, 141m people had received more advanced agricultural technology to improve food security, 15m people had gained access to financing, 101m now had access to improved transport, and 60m people had gained access to water and sanitation.
Having presented these positive results, Adesina asked the Board of Governors to renew their trust in him for the next five years. “Dear Governors,” he said, “these Annual Meetings are my opportunity to offer you my services and seek a second term as President of the African Development Bank. I do so with humility. I do so with an acute sense of duty and commitment. I do so to serve Africa and our Bank.”
Upon his re-election, Adesina said, “I am deeply grateful for the collective trust, strong confidence and support of our shareholders for electing me for a second term as President. It is yet another call for selfless service to Africa and the African Development Bank, to which I will passionately devote myself.”
“The future beckons us for a more developed Africa and a much stronger and resilient African Development Bank Group. We will build on the strong foundations of success in the past five years, while further strengthening the institution, for greater effectiveness and impacts.”
Adesina, who is a former Nigerian minister of agriculture, was the only candidate for the post. The path to his re-election was recently cleared after an independent panel cleared him of allegations raised by whistleblowers in January. He will begin his new term on September 1, 2020.
From the archives – read African Business magazine’s interviews with Akinwumi Adesina
Building back better after Covid-19
The election took place on the final day of the 2020 Annual Meetings of the African Development Bank (AfDB) Group, which were hosted by Côte d’Ivoire. The meetings comprised the 55th annual meeting of the Board of Governors of the Bank and the 46th annual meeting of the African Development Fund, the Group’s concessional arm. Representatives of the 54 African regional member countries and 27 non-regional member states attended online.
In addition to the election of the president, the meetings provided government representatives and other key stakeholders with the opportunity to discuss the big issues concerning Africa’s development. This year, the focus has been on the impact of the coronavirus, with discussions around “Building African back better after the Covid-19 pandemic”.
Nialé Kaba, Ivorian minister for planning and development and president of the Bank’s Board of Governors, stressed that the pandemic was, in spite of all, an opportunity to “take up the challenge of the digitisation of our economies”. She encouraged the Bank’s management “to provide substantial support to African countries individually and collectively in order to strengthen national and regional digital infrastructure for greater connectivity.”
The AfDB is seeking to both minimise the human cost of the pandemic and help African economies recover from the crisis. It is financing its efforts through the Covid-19 Response Facility of up to $10bn, which the Board of Directors approved in April. The threat is huge because of weak healthcare systems and limited social protection.
The Bank is well placed to support the continent in building a sustainable recovery. In July, credit ratings agency Fitch confirmed the Bank’s AAA Long-Term Issuer Default Rating with a stable outlook and its liquidity profile at AAA, reflecting an “excellent” liquidity buffer and quality of liquid assets.
Adesina commented at the time: “We will continue to strengthen our policy relevance to support regional member countries, especially during and after the period of Covid-19, while ensuring that we maintain our prudential ratios with adequate buffers. The Bank will continue to apply strong risk management.”
Outlook for growth
In its updated African Economic Outlook 2020, the AfDB argues that Africa’s GDP could shrink by up to 3.4% under its worst-case scenario, costing 30m jobs. This could push another 49m Africans into extreme poverty, using the $1.90 a day minimum income international poverty standard. However, it says that the impact can be limited if governments and development partners can respond in a coordinated, targeted and rapid manner.
It also states that continental economic growth could reach 3% next year, depending on African governments’ effectiveness in flattening the curve of the outbreak and their success in reopening their economies. The curve has slowly started to flatten, although it is difficult to be sure because of limited testing and data collection in some parts of Africa. The Bank’s original growth forecasts for 2020 and 2021 were 3.9% and 4.1%.
The report says that urgent policy interventions could mitigate the impact of the pandemic if they involve a public health response to contain the spread of the virus and minimise fatalities; a monetary policy response to ease liquidity constraints and solvency risks; and a fiscal response to cushion the economic impacts of the pandemic on livelihoods and to assist businesses.
“We are positive that African countries’ economies will recover as the pandemic subsides and Africa returns to a positive GDP growth trajectory,” Adesina noted, although some sectors, such as tourism and transport, will take longer than others to bounce back.
The AfDB has also called for new labour market policies to protect workers and their jobs, and structural policies to enable African economies to rebuild and enhance their resilience to future shocks, partly by addressing structural bottlenecks. Governments must also build public trust.
AfDB acting chief economist and vice president for economic governance and knowledge management, Charles Leyeka Lufumpa, commented that policymakers needed to follow a phased and incremental approach to reopening their economies “that carefully evaluated the trade-offs between restarting economic activity too quickly and safeguarding the health of the population”.
He added: “Economic activities can be restarted incrementally on the basis of the transmission risks of different sectors.”
The AfDB has also prepared regional analysis to update its African Economic Outlook 2020. In its baseline forecast, the Bank predicts growth of -4.9% for Southern Africa this year, as a combination of South Africa’s lockdown and the fall in commodity prices hit the region hard.
This would make it the most affected region, which could be expected because Covid-19 infection and death rates are worse here than anywhere else on the continent. However, this could also be the result of better detection rates in South Africa.
The AfDB argues that the region needs more economic diversification, led by commodity-driven industrialisation, to boost resilience during downturns. It has also called for more broad-based and pro-poor growth to address poverty and inequality.
However, the Bank believes that rebuilding African economies could also bring long-term structural benefits. For instance, West Africa would benefit from bringing far more young people in the workforce as different sectors of the economy are opened up.
Marie-Laure Akin-Olugbade, director general, Regional Development and Business Delivery Office for West Africa, commented: “West Africa is endowed with a burgeoning youth population that can strategically be harnessed for employment and economic growth.”
Yet the Bank noted that the region’s outcomes in science, technology, engineering and mathematics are particularly low. Improving educational standards in these areas is vital to equipping young people for the labour market.