The head of the African Development Bank (AfDB) Akinwumi Adesina has slammed claims that the bank has issues with accountability, weak governance and harassment of internal oversight officials as “lies and biases”.
Speaking the day before the Bank’s annual meetings opened in Ghana, Adesina said:
“We will not be defined by mischief makers, lies and biases. We are proudly African. We will continue to make Africa proud as Africa’s only AAA-rated financial institution.”
Bank has ‘robust’ management system, says Adesina
In a string of tweets, the former Nigerian agriculture minister reeled off the Bank’s recent achievements claiming:
“We have an excellent and robust management and governance system. We deliver great value for our clients in Africa. Over the past six years, through our High 5 programs, our work has impacted on 335 million people. We deliver great value.”
On May 20, UK magazine The Economist, published an article under the headline ‘Is weak governance harming the African Development Bank?’, outlining a number of incidents at the Abidjan-based bank that it said “raise troubling questions about how it is managed and whether its internal watchdogs have sufficient oversight of the AfDB’s executives.”
“Importantly, they also throw into question whether the bank retains the full confidence of the creditors, donors and shareholders who fund it and whose support it needs to prevent African economies from being dragged down by mounting debt, surging international food and energy prices and the lingering effects of the pandemic.”
Senior executives at the bank allegedly intimidated internal oversight officials and corruption investigators, and fired an independent evaluator when only the board of directors had the right to do so, The Economist says.
“Outsiders saw this incident as having a chilling effect on accountability. A letter signed by nine independent evaluators of multilateral institutions, including those of the World Bank and IMF, said the firing “cuts directly to a fundamental and long-standing principle of independent evaluation”.
Incidents over the last two years also detail how another employee tasked with scrutinising management in the integrity and anti-corruption office, left under pressure from upper management, leaving investigations into allegations of graft against senior officials unfinished.
The bank insists that the HR cases were carried out in consultation with the board of directors and in line with the institutions rulebook.
Contrary to the way other development banks are run (where creditor countries wield a majority of shareholder votes) at the AfDB about 60% of the votes are held by borrowing countries, which may deter shareholders from rallying for reforms, the article says.
“Its shareholders may have many reasons for not demanding change. Borrowing countries may worry that speaking up could result in fewer loans. Non-African donors, some of which are former colonial powers, may worry they will be seen as meddlers.”
Internal governance issues may also have eroded trust in the institution and its ability to fund development as shareholders and donors cool on the bank, The Economist warns.
“In 2019 they approved a smaller percentage increase in capital than in the previous round (though larger in absolute terms) and a much smaller increase than Adesina had requested.
“Yet the AfDB’s new lending fell by 51% between 2019 and 2020, with approvals from its concessional arm, the African Development Fund, slumping by 24%.”
Could Economist article harm the bank?
The editorial line taken in the article reflects the publication’s own biases and governance issues, “in particular the lack of diversity in its writers, editors and senior management,” says the CEO of development consultancy Development Reimagined, Hannah Ryder.
The Economist has covered other “scandals” in development finance institutions differently, blaming controversies on member pressures, without challenging an organisation’s entire governance structure, she says.
“There is a certain way of looking at African institutions which harks back to colonial thinking.”
Asked whether the article’s premise could indeed harm the Bank, she says institutions like the AfDB and IMF are too important to fail.
“The fact is, the African Development Bank, which many do not realise has a mixed governance structure with African and non-African members, and has developed a niche in infrastructure financing on the continent alongside China, needs to grow.
“The financing gap on the continent is far too large. The issues The Economist points to are too small in relation to the task ahead, as well as the Bank’s strong reputation on the continent.
“Just like the IMF, it would require a much more robust article – well beyond one that raises questions around its current leadership – to really damage its credibility.”
AfDB Annual Meetings to examine governance
The furore unfolds as the Abidjan-based development finance institution, tasked with plugging funding gap for African countries, meets in Ghana for its annual meetings on Monday.
The five day meetings featuring more than 3000 delegates will convene around the theme ‘Achieving climate resilience and a just energy transition for Africa.’
During the proceedings, the board of governors is set to discuss an external report into the bank’s governance.
Want to continue reading? Subscribe today.
You've read all your free articles for this month! Subscribe now to enjoy full access to our content.
£8.00 / month
Receive full unlimited access to our articles, opinions, podcasts and more.
£70.00 / year
Our best value offer - save £26 and gain access to all of our digital content for an entire year!