The story behind the '100 percent localized' US development agency

As a child growing up in the segregated environment of Nashville, Tennessee, Travis Adkins had questions. He wondered about how his community was being policed, for example. He was also baffled by images of Africa in the media beamed back to him in America. It was a lot of sickness and disease and warfare and corruption. Adkins went to his mom and asked: Why was this happening to us? “I don't know all the answers,” Adkins remembers her telling him. “‘But I can tell you that we've had challenges here in America ever since we arrived from Africa.” That answer surprised Adkins. It was the first time he learned that his origins were from another part of the world beyond America’s shores. The revelation set him out on a journey to understand the course of history. He dug deeper into the issues of forced migration and the history of his own nation, including its colonial past. “I looked out at Africa and I saw children who looked just like me, men who looked just like my uncles or my grandfather, women who looked just like my mother, or my aunts, facing similar kinds of challenges,” Adkins said. “I was beginning, at a very early stage, to make certain kinds of connections between domestic policy and foreign policy.” So when the board chair of the U.S. African Development Foundation called him in November 2021 and informed him that he was going to be nominated as the agency’s next chief executive, Adkins was thrilled. The foundation invests in early and midstage African businesses, a strategy meant to provide much-needed capital for entrepreneurs on the continent. Unlike a lot of development funders, Adkins said the foundation’s grants go to locally led companies, a core mission of it being a “100% localized development agency.” Adkins brings to the role nearly two decades of experience working on African policy issues, including most recently as a deputy assistant administrator for Africa at the U.S. Agency for International Development. The nomination of Adkins to the head of the foundation came at a critical time for both the U.S. and countries in Africa. The COVID-19 pandemic still has its grip on the world. The murder of George Floyd at the hands of a police officer in Minneapolis in the summer of 2020 sparked global protests that intensified questions about racial justice and equality. Meanwhile, a presidential election two years ago raised the stakes of democracy in the world’s largest economy and seemed to put on the ballot the very nature of what it meant to be American. “We are creating the kinds of partnerships on the continent that are rooted in respect for the agency of African people.” --— Travis Adkins, president and CEO, U.S. African Development Foundation “All the questions that had been central to my life were being asked by everyone, all the time, in the crucible of this social turmoil, governance challenges, and then the global health challenge,” Adkins told Dexev in an interview last month. Adkins was sworn into the role in January and has taken the helm of the foundation at a time when the Biden administration is resetting its relationship with African countries. In August, U.S. Secretary of State Antony Blinken announced a "new strategy" for the continent that put economic partnership at the center of its Africa policy. In December, President Joe Biden will host the United States-Africa Leaders Summit in Washington, D.C., with economic engagement again at the top of the agenda. Talk of economic partnerships and investment in Africa is set to make the foundation a critical player in America’s foreign policy discussions, especially at a time of great debates over localization of U.S. foreign aid. “One of the things that's unique about us is that we are a 100% localized development agency,” Adkins said. Leading an agency that could be a model for African-led economic development in American policy circles was exciting for Adkins. Growing up in a segregated environment has shaped how he approaches the job. “It’s what gave me the contrast of unfairness and injustice in societies, including our own, and then looking out into the world, and saying why, and then trying to figure out how I could be a part of changing it,” Adkins said. “What started from an 8 or 9-year-old boy is the journey, really, that has led me to this space today.” ‘Bonds of friendship’ At its creation, the vision for what would become USADF, was to help “strengthen the bonds of friendship” between Africans and Americans. Over the last five years, the foundation has invested $120 million in African businesses. It grants capital — capped at $250,000 — in early-stage small- and medium-enterprises on the continent. A key part of the investment strategy is to help businesses outgrow the need for grants and get to a point where they can be credit-worthy and secure financing from commercial sources, Adkins said. Energy, agriculture along with projects that focus on youth and women entrepreneurs are key areas of investment for the foundation. Adkins said that the mandate is to pour capital directly into businesses. “There's no use of U.S. based NGOs to funnel the money through,” Adkins said. Asked how they decide on who to fund, Adkins said that the foundation periodically issued open calls for proposals. He also said that they planned to launch an intake portal for funding pitches. “This would allow enterprises and social entrepreneurs across the continent to send their proposals for funding on a routine or rolling basis, every day of the week, every day of the year,” Adkins said. The foundation has operations run by Africans in 21 countries. But taking into account its full investment portfolio and collaborations with other U.S. government agencies, its reach expands to 40 African states in the Sahel, Horn, and Great Lakes regions of the continent. “All of our staff on the continent are African nationals of the countries in which they work,” Adkins said. Local knowledge the African-based staff bring to the table helps determine who to fund, he pointed out. Blending finance In 2022, at $40 million, the foundation’s annual budget was relatively small compared to other U.S. government agencies. Congress has proposed appropriating $45 million for the foundation for 2023. Adkins was excited about the upward trend in funding. Small- and medium-enterprises, Adkins said, are critical for Africa's economic growth, especially in the post-pandemic moment the global economy finds itself. “What that means for us is that we can do more for the people that we serve,” he said. The foundation uses the government funding it receives to leverage more capital. Earlier this year, it said that it planned to augment the federal funds it requested to raise $83 million from African governments, private foundations and corporations, and other U.S. interagency sources to stretch its investment pool of capital. Adkins said that the foundation, along with the U.S. International Development Finance Corporation, was piloting a blended finance program in four countries — Côte d’Ivoire, Nigeria, Senegal, and Uganda — to help de-risk and unlock more private sector capital for businesses on the continent. The move would help companies to secure funding beyond the maximum $250,000 that the foundation can provide. In June, the foundation announced a blended financing deal with three clean energy companies in Kenya in partnership with Nithio, a private sector lender to off-grid solar businesses. The foundation committed grants worth $635,000, while Nithio committed $1.75 million in secured loans to three businesses working in the off-grid energy space. This strategy, along with its work with African governments to do co-funding partnerships at the national and state level and interagency partners, or corporate entities has allowed the foundation “to punch above its weight,” Adkins said. One source of funding Adkins wants to explore is from the African diaspora. Diaspora communities send back more money to their home countries than all of the foreign direct investment and official aid that goes into the continent, he pointed out. He echoed what the International Monetary Fund has said in the past which revealed that in 2019 the $47 billion that Africans in the diaspora sent home had become “the largest source of foreign income for the region.” “Africans in the diaspora are not waiting for help from other places. They're taking it in their own hands to support their nations and their villages and their communities,” Adkins said. Africa is foundational Adkins teaches African Studies at Georgetown University’s Walsh School of Foreign Service. He said his message to the next generation of policymakers was how foundational Africa was to the development of the Western world. “We shouldn't have to guess whether or not it matters for our foreign policy, whether or not it's important, whether or not we should be more deeply engaged,” he said. Adkins said he saw his and the foundation’s mandate to invest directly in African businesses as a form of localized development. “We are creating the kinds of partnerships on the continent that are rooted in respect for the agency of African people,” he said. For Adkins, the job is a dream realized. “It's just wonderful to wake up each morning, with the opportunity to exercise some of these dreams, as realities, and spend time on the continent, with communities, in remote villages, in urban areas, with heads of state and foreign ministers,” he said.