The AfDB Wahala: It’s all about money

This period of pandemic-induced high deficit spending by many African governments is hardly a good time to talk about increasing contributions to pan-African institutions. However, the apparent overreach of the U.S. in the African Development Bank crisis leaves little choice.

But truth be told, Akinwumi Adesina’s problems at the African Development Bank (AfDB) are not rooted in American meddling. Far from it, the taproot of his setback is the free-loading appetite of African governments. Many of them want Americans, Europeans or Asians to pick up the tab for the work of continental institutions, and then turn around to complain about meddling and sovereignty and independence.

Of AfDB’s 80 member countries, 54 are African and 26 are rich European and Asian countries, and the United States of America. There’s nothing wrong with this. Even the highly successful Asian Development Bank (ADB) has a good number of non-regional countries as subscribers. While most of the Bank’s member countries are from the Asia-Pacific region, many industrialised nations from other parts of the world are adequately represented in it too. In fact, the United States is one of the two largest shareholders of the ADB; the other is Japan.

In both Africa and the Asia-Pacific regions, the foreign members of both regional banks, AfDB and ADB, have strategic interests that guide their investments. It is this that necessitates their so-called intrusiveness, which commonsense should expect to be inversely proportional to the contributions of regional countries.

As a continental development finance institution established to support the economic development and social progress of African member countries, the AfDB needs a lot of money. But African countries – with the possible exception of Nigeria – are reluctant to generously put their money where their mouths are when it comes to supporting Africa’s multilateral institutions, of which the African Union (AU) and the AfDB are just two examples.

We act as if there is nothing strange in depending on non-African countries to do the heavy financial lifting that makes the work of our continental institutions possible. The AfDB’s ability to raise funds on international markets for its impressive development work here in the continent is based on its enviable Triple-A ratings from all the main international rating agencies. This, in turn, is based on the financial contributions of America and other non-regional countries.

The same donor dependency marks the AU and other regional or continental institutions in Africa. Indeed, the AU’s single largest source of funding remains foreign donors. Not long ago, the relations between it and its overseas patrons also soured because of a combination of brazen interference and donor concerns on some issues of bad governance at the AU. This caused African leaders to opt for a self-financing model in 2016, when they boldly approved a 0.2 per cent levy on eligible imports into the continent to finance the African Union.

Whether every member is religiously complying with this policy is another matter. What’s important is that the historic decision is a realisation that if you don’t want foreign meddling in your business, you fund it yourself.

Perhaps due to the concentric approach in its foreign policy pioneered by Professor Ibrahim Gambari in the 1980s, Nigeria appears to realise this more than any other African member state of the AfDB. The concentric model of Nigeria’s foreign policy holds that Nigeria’s national interest is best protected through an inside-out approach – starting first with our own people, to West Africa, to the continent, and then to the world and its international organisations.

It is in this spirit that the federal government established the Nigerian Trust Fund (NTF) in 1976. Today, its capital is one of the main sources of AfDB’s funds. Still, the NTF, plus all the subscriptions from African member states, don’t come close to the billions of dollars that flow into AfDB from the United States and the other non-regional members.

That’s why it is all about money. That’s why Dr. Adesina may be in deep water, and that’s why the AfDB itself should be quaking in its boots because when push comes to shove, President Trump will not hesitate to withdraw American money.