The US Senate's funding plan, DFC's domestic deal, and Adesina's ethics review: This week in development

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African Development Bank President Akinwumi Adesina. Photo by: Paul Kagame / CC BY-NC-ND

The U.S. Senate underwhelms on international coronavirus funding, the U.S. International Development Finance Corporation raises eyebrows — and stock prices — with a domestic deal, and an independent review clears the African Development Bank president of ethics accusations. This week in development:

The U.S. Senate unveiled a coronavirus relief proposal Monday, which left global health advocates underwhelmed. The $1 trillion HEALS Act includes about $4.4 billion for global COVID-19 relief efforts, well short of the $20 billion advocates have called for. It arrives amid warnings from the World Health Organization that the pandemic could be rapidly accelerating on the African continent. The proposed package includes $1 billion for the U.S. International Disaster Assistance account; $3 billion for global health programs, including funding for Gavi, the Vaccine Alliance; $10 million for U.S. Agency for International Development operating expenses; and $425 million for State Department consular and border security programs. The bill does not include any money for The Global Fund to Fight AIDS, Tuberculosis and Malaria, which says it expects by the end of this month to exhaust the $1 billion in COVID-19 relief funding it was able to mobilize. The Senate’s bill follows a U.S. House of Representatives proposal that did not include any funding for international response efforts. While Congress continues to negotiate over these packages, White House officials are defending the presidential administration’s own budget and policy proposals on Capitol Hill. John Barsa, USAID’s acting administrator, faced tough questions from Democrats on the House Foreign Affairs Committee last week, who repeatedly slammed recent controversial political appointments at the agency, rejected the administration’s proposed budget cuts to foreign aid, and criticized the White House’s lack of involvement in efforts to ensure equitable access to an eventual coronavirus vaccine.

The U.S. International Development Finance Corporation announced its first loan to a domestic company as part of the White House’s plan to use a U.S. government agency tasked with investing in developing countries to shore up U.S. domestic drug production under the Defense Production Act. The $765 million loan to Eastman Kodak, which filed for bankruptcy in 2012 after its photographic film business collapsed, immediately sent the company’s stock price soaring — jumping as much as 2,760% after Monday’s announcement. The loan is intended to help Kodak reemerge as a manufacturer of pharmaceutical ingredients for generic drugs. Devex spoke to DFC CEO Adam Boehler in May after the White House described its plan to tap the newly created development agency for domestic purposes. Boehler, who is an adviser to the White House Coronavirus Task Force, gave assurances that DFC’s domestic efforts would be limited to a two-year period and administered by a separate team to avoid detracting from the agency’s core international development mandate. “I’m cognizant of those risks. I took the role because I believe in our mission and our vision and values, and I hold those sacred,” he said at the time. U.S. development experts have acknowledged that the coronavirus crisis might demand unforeseen government action but also expressed concern about mission creep at an agency still organizing itself under a new structure. Those concerns appeared heightened by this high-profile and surprising domestic investment. “Crisis exigencies are what they are, but it's worth noting that this is pretty much doing the opposite of what @DFCgov was set up to do,” wrote Scott Morris, a senior fellow at the Center for Global Development, on Twitter.

African Development Bank President Akinwumi Adesina has been cleared of ethics and corruption accusations after seven months of controversy at Africa’s largest multilateral development bank, paving the way for the bank chief to win a second term at the institution. The independent review followed January allegations from a group of unnamed whistleblowers that Adesina improperly awarded contracts to acquaintances and appointed relatives to strategic positions. The bank’s own ethics committee described these allegations as "frivolous and without merit” in March, and an internal review cleared the AfDB chief of wrongdoing in May. However, U.S. Treasury Secretary Steven Mnuchin called this internal process into question in a letter to the bank’s board — prompting an independent probe, as well as accusations from some African leaders that the U.S. government was overstepping on issues related to the bank’s governance. “If we do not rise up and defend the African Development Bank, this might mean the end of the African Development Bank, as its governance will be hijacked away from Africa,” wrote former Nigerian President Olusegun Obasanjo in a letter to African leaders. The independent review included Mary Robinson, Ireland’s former president; Justice Hassan Jallow, former minister of justice in Gambia; and Leonard McCarthy, former vice president of the World Bank Integrity Vice Presidency. They agreed with the bank’s ethics committee that the allegations against Adesina were "properly considered and dismissed.”

About the author

  • Michael Igoe

    Michael Igoe is a Senior Reporter with Devex, based in Washington, D.C. He covers U.S. foreign aid, global health, climate change, and development finance. Prior to joining Devex, Michael researched water management and climate change adaptation in post-Soviet Central Asia, where he also wrote for EurasiaNet. Michael earned his bachelor's degree from Bowdoin College, where he majored in Russian, and his master’s degree from the University of Montana, where he studied international conservation and development.