One good turn should deserve another good turn. But this appear not to be the case at Africa’s premier financial institution; African Development Bank (AfDB) as same forces that have kept Africa in its beggarly status are hell bent on thwarting the flying progress being made by one of Africa’s best technocrats; Dr. Akinwumi Adesina, President of the African Development Bank. Founded in 1964 with the overarching objective to spur sustainable economic development and social progress in its regional member countries, thus contributing to poverty reduction, the Bank in the past five decades, has been at the forefront of driving Africa’s economic transformation, leveraging its diverse resources and unique know-how as an indigenous development finance institution.
Evidently delivering on its goals of reducing poverty and fostering inclusive growth on the continent, the African Development Bank has scaled up development support for its 54 regional member countries and recorded remarkable successes in recent years as part of a renewed push to help deliver life-changing impact to livelihoods. This could be gleaned from its investments which have benefited millions of Africans through its 10-year strategy which it began implementing from 2013.
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But since the coming of Akinwumi Adesina, the Bank has become more than a development finance institution. It has become a socio-economic and development livewire of the continent, bringing together all other development and pseudo-development institutions to be on same page regarding Africa’s uplift, unlike what obtains before when different African institutions work at cross purposes to one another, thus garnering unprecedented faith from both regional and non-regional member countries on the AfDBs capacity as driver of continental development.
This is evidenced from the last General Capital Increase of the Bank which can be described as landmark. At the Bank’s extraordinary shareholders’ meeting in October 2019 in Abidjan, Cote d’Ivoire, governors representing shareholders from 80 member countries, approved a landmark $115 billion increase in capital for the financial institution. The increase, which is the largest in the history of the Bank since its establishment in 1964, more than doubled its capital from $93 billion to $208 billion. This solidifies the Bank’s leadership in development financing for the continent.
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Add to that, the Bank also had a successful African Development Fund (ADF15) replenishment in December last year as donors announced a remarkable $7.6 billion to replenish the Fund. The replenishment represented a 35% increase in financing for low-income African countries at the end of the fifteenth replenishment of the African Development Fund, the concessional window of the Bank Group. The ADF which contributes to poverty reduction and economic and social development in the 38 least developed African countries by providing concessional funding for projects and programs, as well as technical assistance for studies and capacity-building activities has been the most active development oriented vehicle in the continent in recent times.
Akinwumi Adesina has given far more opportunities for African women to rise to the top of their game in business, and in their chosen fields of endeavours. It could be recalled that through his efforts with the resource mobilization for women-owned businesses at G7 summit of world leaders in Biarritz, France, last year, a global campaign of the Affirmative Finance Action for Women in Africa (AFAWA) to mobilize $3 billion for women entrepreneurs in Africa was launched, with strong support and resources from G7 leaders and nations. At that summit, French President Emmanuel Macron announced France’s contribution of $135 million to the AFAWA initiative to encourage women’s access to funding in Africa. The amount represents more than half the financial support of $251 million promised by the G7 governments.
No relenting on his oars, Dr. Adesina like Oliver Twist wanted some more, he co-hosted delegations from around the world for the first Global Gender Summit held in Africa, in Kigali, Rwanda. The gathering, attended by the presidents from Africa moved the needle forward on gender equality and women’s empowerment in Africa and around the world. Several agreements were signed to facilitate project financing for women entrepreneurs in Africa. And at the 2019 Africa Investment Forum (AIF), the Bank secured more than $40 billion worth of investment interest in less than 72 hours at the second edition of the Africa Investment Forum held in Johannesburg, South Africa. The Forum, Africa’s largest marketplace for mobilizing capital, featured 56 boardroom deals valued at $67.6 billion – a 44% increase from the 2018 debut.
It is thanks to his commitments to transparency that he has established a legacy of a very open institution which contrasts to what obtains within the African milieu where most public institutions are filled with skeletons. Presently, the AfDB ranks 4th globally in transparency among 45 multilateral and bilateral institutions by Publish What You Fund, an outfit that consists of 19 developed economies. In addition, all the major rating agencies Moody’s, Standard & Poor’s, Fitch and the Japanese Credit Rating Agency have assigned it a triple-A rating. The outlook on all the ratings is stable and reflects the Bank’s strong membership support, healthy capital adequacy, preferred creditor status and strong financial condition.
In manifestation of its strength in innovation, the Bank has been at the forefront of knowledge adoption and application towards addressing everyday challenges which has turned it into a leading institution in pioneering financial instruments. For example, the AfDB’s Room2Run, a pioneering $1 billion synthetic securitization of a portfolio of its private sector loans to serve as a model for other multilateral development banks and investors as they seek new ways to release much-needed financing to catalyse private capital in developing markets, is the first of its type. Some other multilateral financial development institutions are working on adopting and domesticating it for their operations.
In March 2020, the AfDB launched what was celebrated globally as the Covid-19 Social Bond when it raised an exceptional $3 billion in a three-year bond to help ease the economic and social impact of the Covid-19 pandemic on livelihoods and Africa’s economies. The Fight Covid-19 social bond garnered interest from central banks and official institutions, bank treasuries, and asset managers, including socially responsible investors, with bids exceeding $4.6 billion. It was the largest dollar-denominated social bond ever launched in international capital markets and the largest US dollar benchmark ever issued by the Bank. It will pay an interest rate of 0.75%. Add to that, the AfDB celebrated another milestone with the listing of its Fight Covid-19 social bond on the London Stock Exchange on April 3. The bond is now available through its Sustainable Bond Market.
Another cutting edge innovative policy is the Technologies for African Agricultural Transformation program (TAAT) which is leading the charge in helping to transform local staple crops across the continent, including maize, rice, wheat, cassava, high-iron beans, sorghum, millet, orange-fleshed sweet potatoes as well as livestock and fish. TAAT aims to raise food output in Africa by 100 million tons and lift 40 million people out of poverty by 2025 by harnessing high-impact, proven technologies to raise productivity, mitigate risks, and promote diversification and processing.
What Akinwumi Adesina is driving at the African Development Bank (AfDB) is a revolution that will not only harness Africa’s huge potential in agriculture to grow its economy; it will also cut significantly the wastage in foreign exchange through food importation which gulps up over half of its GDP annually and funds diverted to other sectors of the economy. Africa stands to lose if this revolution is cut short by same forces who stands to lose when Africa becomes self sufficient in food production.
Kelechi Deca, a journalist and economic development analyst lives in Lagos.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry