At the 2015 annual meetings in Ivory Coast this week, African heads of state, ministers and nonregional member representatives paid tribute to Donald Kaberuka, the outgoing president of the African Development Bank.
“I introduced the bank on the financial market, but Donald Kaberuka has given Africa a voice on the global platform,” former AfDB President Babacar Ndiaye said at the opening of the meetings Monday.
Nigerian finance minister Ngozi Okonjo-Iweala meanwhile hailed him for being a “true and trusted voice for Africa.”
But amid the praises, Kaberuka admits there’s still a lot to be done. For instance, while Africa’s growth is strong at 5 percent, it is still below the 7 percent minimum African countries have been aiming for over a decade, he said in an interview with BBC. And while the bank has been championing infrastructure development, huge gaps remain, which now will be passed on to the bank’s new president, Nigerian agriculture minister Akinwumi Adesina.
Many credit Kaberuka for making the bank the “premiere” institution for Africa. Under his leadership, the bank was able to boost its presence among member states, increase its capital, carve out its role, and return to its roots in Abidjan — although not without consequence. The bank lost considerable talent in the process, and is now looking to fill those now-empty positions.
Kaberuka has set a 10-year strategy for the bank — which Adesina seems inclined to follow — introduced new initiatives and opened doors. In 2014, the board agreed to allow countries eligible to receive funding only from the bank’s African Development Fund to also have access to AfDB’s sovereign window.
New mechanisms were announced as well, including the African Guarantee Fund to benefit small and medium enterprises, the Private Sector Credit Enhancement Facility, and the much-talked about Africa50 fund aimed at accelerating the continent's infrastructure development.
Under Kaberuka’s leadership, AfDB increased its focus on gender, appointing a special and envoy and releasing its first gender strategy during the past couple of years. And this week, the bank unveiled its first gender equality index.
New AfDB chief Akinwumi Adesina: 'I will not let you down'
Nigeria just simultaneously lost its agriculture minister and gained its first African Development Bank president. After more than five hours of anticipation and frenzy over social media on Thursday, Africa’s premier development finance institution announced its new president: Akinwumi Adesina, the man known for his colorful bow ties.
But the job is far from over. As Kaberuka sets sail for his next adventure, he leaves behind an unfinished decentralization process, a bank that’s refamiliarizing itself with its original stomping grounds, and an institution that’s under pressure from shareholders that demand more impact and accountability, beneficiaries that require greater resources, and a development finance landscape that’s becoming more and more crowded and competitive.
“It is a complex and merciless job, but very exciting,” Kaberuka told his then-yet-to-be-elected successor in his opening statement at the meetings, noting the bank is preparing a “well-designed transition for your smooth landing and to hit the ground running.”
But the beloved president is also leaving behind current and former bank staff craving for change in the way the institution goes about its business.
An AfDB socio-economist who requested to remain anonymous said the Adesina must reassess the bank and its current approach in the continent, noting “there is much room for improvement.”
The official is particularly concerned with the bank’s current investment priorities. AfDB is currently focusing its work on infrastructure and private sector development, which the official acknowledged are areas where the bank has competitive advantage. But concentrating on these issues — and in the process neglecting areas such as health, education, peace and security — isn’t sustainable, as the international community has and should have learned from how insufficient heath investments exacerbated the Ebola outbreak.
“One might argue this is not our mandate, yet if it’s clear that the lack of effort within these sectors might endanger the success of others, how well are we managing/mitigating the risks to our operations?” the official asked.
The bank needs to also invest in developing the skills and education of people, so the infrastructure it is supporting to build will be of real use and function as planned. It also has to truly engage with civil society actors — and not just in a “very theoretical manner” — and build capable institutions to create resilience, particularly in areas vulnerable to conflict.
We need a mix of skills
But in working in such fragile contexts, the bank needs to understand it requires a diverse set of skills, and that it cannot just rely on its many engineers and economists, the official argued. It needs to have anthropologists, social experts and political economists on its payroll, for example, especially those with deep knowledge of the countries the bank works in and understands the sensitivities and contexts on the ground.
A program coordinator at the bank shared the same sentiment: Adesina must have the courage to properly set the institution’s skill mix.
“We have to stop recruiting staff that were not good enough for other institutions,” he added.
The socio-economist said that while moving back to Abidjan may have reduced the bank’s workforce, it also opened an opportunity for change. Implementing transformative reforms may be a challenging task for Adesina, however, or indeed for anyone who is not familiar with the inner workings at the bank. The program coordinator fears the “informal network within the bureaucracy of the bank will not allow the necessary changes to happen.”
Build our DFIs
Another area the bank can look into is building the capacity of development finance institutions — specifically those within the continent.
This is not to say that the bank is not already doing this, according to Zach Bloomfield, a former AfDB program specialist whose recent experience allowed him to also gain an understanding of the needs of different subregional banks and national ministries from the institution.
During Bloomfield’s time at the bank, a number of “million-dollar technical assistance programs” were given to these institutions to address what he described as “sparing to severe capacity constraints” in human and financial resources.
But AfDB could do more by boosting its partnerships with these regional financial institutions, as well as building the capacity of national and smaller, more localized ones, which could eventually take some of the load of the multilateral development bank in the long run. The problem though is that AfDB, under Kaberuka’s leadership, seems more interested in partnering with institutions outside the continent, according to Bloomfield.
“In general, it seems that there is an attitude and perhaps also a strategic choice by the AfDB to pursue partnerships with institutions that are, so to speak, ‘up the development finance food chain,’ [whereas] on-continent DFIs are largely disregarded by most of the AfDB’s operations departments as either unreliable or as incapable partners who can be led around by the ear,” he shared.
Enough with decentralization?
In addition, the bank has invested significant time and resources in decentralizing operations, but that is “not serving the DFIs it owns well.”
Bloomfield said that while he understands the decentralization process is part of the bank’s efforts to “get closer” to operations on the ground, “AfDB’s comparative advantage in the grand scheme of development finance does not require it to decentralize and get closer to serve progressively smaller clients.”
Rather, he argued, the bank’s advantage is in catalyzing access to international capital markets and undertaking or syndicating massive infrastructure finance projects.
AfDB, according to Bloomfield, is stretching itself to reach areas where “it has no business” or are better served by the smaller, locally available DFIs.
According to the bank’s rolling plan and budget document, AfDB now has 38 field offices and regional resource centers, and is currently managing 59 percent of bank-financed operations. Following a midterm review concluded in June 2014, management started working on an action plan to “appropriately sharpen the bank’s decentralization model.”
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