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.
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| Nigerian agriculture minister Akinwumi Adesina will succeed Donald Kaberuka |
“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.
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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