BusinessDay
Nigeria's leading finance and market intelligence news report.

Explainer: How Akinwumi Adesina’s probe at AfDB eats away independence

Three days ago, former President Olusegun Obasanjo wrote a letter to fourteen past African presidents seeking support for Akinwumi Adesina, president of African Development Bank (AfDB), who is being probed for alleged breach of the code of conduct as an elected official.

In the letter, Obasanjo outlined some milestones that Adesina has attained in his five years as president of the AfDB. Some of these achievements included a capital increase of the bank from $93 billion to $208 billion, an increase of $155 billion, representing a 123 percent increase, the highest in the history of the bank since its establishment in 1964.

Under his leadership, the Bank launched the Africa Investment Forum (AIF) to mobilise massive flows of capital to Africa. The inaugural launch of the AIF held in Johannesburg, South Africa, secured $38.7 billion of investment interests within less than 72 hours.

The bank has also substantially aligned its financing and operations to help accelerate Agenda 2063 and the High 5 agenda of the bank (Light Up and Power Africa; Feed Africa; Industrialise Africa; Integrate Africa; and Improve the Quality of Life of the People of Africa).

Additionally, the AfDB, for four years in a row, received an AAA rating from the four major rating agencies, a confirmation that the Bank has been considered year-on-year, to possess excellent liquidity, sound financial and risk management, as well as strong shareholder support.

These are only some of Adesina’s achievements, selected in no particular order. Adesina is running for re-election in August unopposed. With these feathers to his cap, his bid for re-election would have been automatic, but no, this is not the case.

Adesina’s sixteen alleged breaches

By the early part of January 2020, a document containing complaints made to the bank’s Ethics Committee by some staff under its Whistleblower Policy was circulated in the public domain and by March, it had fallen into the hands of journalists at Le Monde, a French afternoon newspaper who broke the story under the headline: “President Adesina Challenged by Employees at the African Development Bank”.

The sixteen alleged breaches of the code of conduct of an elected officer of the bank bordered on unethical conduct, an impediment to efficiency, political activity, private gain and preferential treatment. Le Monde captured the Petitioners’ grumbles comprising “favouritism for the benefit of relatives and compatriots, hindering efficiency and eroding confidence in the integrity of the Bank.”

Steven Ogboko, Lagos-based public affairs analyst, in a recent piece published at BusinessDay, noted that a breakaway faction had since accused the bank’s executive director representing the United States of America, who at the time was an active member of the bank’s Ethics Committee, of being the mastermind of the petition.

Interestingly, the Africa version of the newspaper, Le Monde Afrique, in a subsequent publication, put the matter from a different perspective. In the piece, Michael Pauron wrote about the “Settling of Accounts at the African Development Bank”.

The article argued that the break-away faction of the aggrieved staff wrote a complaint against a certain Steven Dowd the American executive director, alerting that his ultimate intent was to prevent Adesina from starting a second term as president of the AfDB.

In contrast, President Donald Trump’s administration has strongly supported the AfDB’s general capital increase and the drive to replenish the African Development Fund. When the Bank sought to float the Affirmative Finance Action for Women in Africa (AFAWA), the United States did not just support it but sent Ivanka Trump to represent the USA at the flag-off and register a strong endorsement of the effort.

The Ethics Committee’s report, Mnuchin, AfDB’s independence

Article 3 of Resolution No. B/BG/2008/11 provides for the AfDB’s “Whistleblowing and Complaints Handling Policy” and the Ethics Committee is empowered to “conduct a preliminary examination of a complaint or allegation received by it to determine whether it is based on apparently solid justifications, with a view to submitting it to the chairperson of the Bureau of the Board of Governors.”

If the preliminary examination of the complaint or allegation reveals it was “frivolous or not based on any objective and solid facts,” the resolution empowers the Committee to dismiss it.

After three months, on completion of the preliminary review of all the sixteen allegations in the petition, the committee in its report to the chairperson, board of governors, dismissed them, having established they were “not based on any objective and solid facts” under Resolution No. B/BG/2008/11.

But Steven Mnuchin, the U.S. Treasury Secretary has openly rejected the decision of the bank’s ethics committee. This move puts the independence of the bank’s corporate governance structure at risk and raises doubt about the bank’s internal integrity mechanisms.

There have been demands from various quarters stating that this interferes with laid down procedures and compromises the bank’s corporate governance independence. “We should speak against the introduction of alien practices being recommended by some parties given that such recommendation falls outside the laid down procedure, laws, rules and regulations of the Bank,” Obasanjo said.

Although it was reported that a fresh external investigation has been ordered, a statement credited to Niale Kaba, chairperson of the board of governors of the AfDB (sighted by BusinessDay) has said the board did not request for a fresh investigation of Adesina and that it is also untrue the president of the bank has been asked to resign.

Whatsapp mobile

Get real time updates directly on you device, subscribe now.

Comments are closed.