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African Development Bank bows to US pressure over inquiry into alleged wrongdoing

Saturday June 6, 2020
By David Pilling

African Development Bank bows to US pressure over inquiry into alleged wrongdoing

AfDB president Akinwumi Adesina is facing an independent inquiry into alleged misconduct after the US questioned an internal committee’s decision to clear him of wrongdoing © Bloomberg

The African Development Bank has bowed to US pressure to open an independent evaluation of an inquiry into its president, Akinwumi Adesina, after weeks in which past and present African leaders have complained bitterly that Washington is meddling in the institution’s affairs.

The accusations surrounding Mr Adesina, a dapper, bow-tie-wearing former Nigerian agriculture minister, have plunged the AAA-rated lender into its most serious crisis since 2003 when it had to relocate to Tunis for a decade because of civil war in Ivory Coast.

The dispute has been brewing since January, when whistleblowers, calling themselves “concerned staff members”, sent a 16-point document to the bank’s anti-corruption department and its ethics committee. They accused the president of ignoring bank procedures and appointing old friends, many of them Nigerians, to AfDB jobs. They also spotlighted examples of lucrative contracts that they alleged had been awarded without due process.

The ethics committee, chaired by Takuji Yano, Japan’s executive director at the bank, cleared Mr Adesina of all wrongdoing. But in a leaked letter from May 22, Steven Mnuchin, US Treasury secretary, expressed “deep reservations” about the “integrity” of the internal inquiry and pushed for an independent probe. The US is the bank’s second-biggest shareholder after Nigeria.

The AfDB on Thursday reiterated its support for the original decision of the ethics committee but said it had agreed to an “independent review” of those findings in order to satisfy all members of the bank’s board.

Mr Adesina has vigorously denied what he called “trumped-up allegations”, lashing out in a May 27 statement at “attempts by some to tarnish my reputation and prejudice the bank’s governance procedures”.

Under Mr Adesina, the bank, which lends to projects designed to combat poverty, won approval from its 80 members in October last year for a $115bn capital increase, the largest in its 55-year history, more than doubling its capital.

The decision was seen as a vote of confidence in Mr Adesina, 60, who is still planning to seek re-election for a second term in a contest that has been rescheduled for August because of the coronavirus pandemic. Mr Adesina has won support for his re-election as bank president from 54 African countries.

Mr Mnuchin’s call for an independent probe has pitted the US — and several European governments that have also pushed for an investigation — against many of Mr Adesina’s supporters, who quickly rallied to his defence.

“I’ve known Dr Adesina for several years, we’ve worked together, and I’ve no doubt about his integrity,” said Arunma Oteh, an academic scholar at Oxford university and former treasurer at the World Bank.

“We are in the middle of a Covid-19 pandemic and the African Development Bank is one of the most important institutions for rallying the economic resources to fight this,” she said, alluding to the bank’s issuance of a $3bn “Fight Covid-19” social bond and its establishment of a $10bn crisis facility.

Ms Oteh refrained from criticising Washington directly, saying only: “When you’re an African you have to be above board because people will assume you’re doing wrong. And when you are Nigerian it is even worse.”

But other supporters were less restrained. “We are not in the 1950s. You can’t write to Africans as if we were your slaves,” said one person, who has worked at the bank.

Some allies of Mr Adesina said it was hypocritical for a US administration, in which President Donald Trump is advised by his daughter and son-in-law, to complain about Mr Adesina’s alleged nepotism, one of the accusations against him.

They also accused Washington — fresh from its withdrawal from the World Health Organization — of using multilateral institutions to pick fights with China, although Beijing has not traditionally played a big role at the AfDB.

“The African Development Bank is a pride for all of Africa, and its President, Dr Adesina, has taken the bank to enviable heights,” said Olusegun Obasanjo, a former president of Nigeria, and Ellen Johnson Sirleaf, a former Liberian president and Nobel Peace laureate, in a joint statement with several other former African leaders.

The bank’s procedures should be honoured, they said, referring to the internal inquiry that had already cleared Mr Adesina, criticising what they described as American hubris: “No nation, regardless of how powerful, has a veto power over the African Development Bank.”

Some close observers of the bank said Mr Adesina’s attempt to garner political support had backfired. “He’s wrapping himself in the African flag to say these colonialists are interfering,” said one African banking executive.

Others pointed to what they said had been Mr Adesina’s high-handed style and alleged habit of firing people without due process in order to bring in his compatriots, something he has denied.

It was not only the US that had asked for an independent inquiry. The UK and several Nordic countries also pushed for an external investigation, if only to clear Mr Adesina’s name in time for August’s election. In its statement on Thursday, the bank said that the inquiry would take “two to four weeks maximum” in order to accommodate the electoral calendar.

Ms Oteh, the former World Bank treasurer, said that attempts to impugn the bank’s reputation were misguided. At least the AfDB held competitive elections to select its head, she said, referring to Mr Adesina’s victory in 2015 against several candidates, including the finance ministers of Cape Verde, Chad and Ethiopia.

That was not like the Asian Development Bank, said Ms Oteh, where the president was always a Japanese national chosen by Tokyo. Nor was it like the World Bank itself, she added, where all 12 presidents since 1946 have been American.


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