Dr Akinwumi Ayodeji Adesina, Nigeria’s minister of agriculture and rural development, is a candidate for the presidency of the African Development Bank. His bid, endorsed by president-elect Mohammadu Buhari, is backed by his broad experience of development projects, as he told Stephen Williams in a wide-ranging conversation.
You might describe him as being a high-flyer, among the highest echelons of international civil servants, but Dr Akinwumi Adesina recalls a modest upbringing.
“My father and my grandfather, they worked as labourers on other people’s farms, they were not earning more than ten cents a day and my dad couldn’t read and write until he was 14 years old, when an uncle of his came to the village and took him off to school.
“So, he went to school and he had to start on the very bottom rung of the public service, and he made his way gradually to the top. But we lived in very poor neighbourhoods, myself and my four siblings slept always on mats, in one single room. We lived in places where there was no water, no electricity.”
That is an unlikely background for someone intent on taking the top job at the African Development Bank (AfDB), Africa’s most important development institution, but one which has marked him and which reminds him that the primary focus of any development agenda is the ordinary man and woman, “the child being able to go to school, or the mother having access to water and electricity”. Adesina is in no way underestimating the challenges that Africa faces, and the critical role that the AfDB has in meeting those challenges. While acknowledging the achievements of the current president of the Bank, Donald Kaberuka, who steps down at the end of his term this month (May) at the Bank’s annual meeting in Abidjan, he believes that the agenda has somewhat changed over the past decade.
“Donald Kaberuka has done a fantastic job of leading the AfDB and Africa has had a significant amount of economic growth for a very long time, averaging 6%, but the challenges of Africa are quite different today,” Adesina says. “The challenges facing Africa include the fact that the growth process that we have is not inclusive.
“[Consequently] there are hundreds of millions of people that are left out of that growth process, and it’s driving a massive amount of migration to urban areas, and people are leaving Africa in droves via the Sahara and Mediterranean because they are disconnected from that growth process.”
Adesina is well versed and talks passionately and with complete ease about development issues. Throughout our interview he was reeling off statistics and facts, and always citing clear examples to illustrate his points.
With his trademark bow-tie, the dapper and erudite young minister makes a compelling case for five priority policy areas. “The five areas that I will focus my energy on, that will keep me up at night, are basically what’s in my Mission Statement for the Bank.”
The first area is a continuation of a central plank in the AfDB’s current policy, a focus on building smart infrastructure, building infrastructure for a purpose. The second area is to stimulate the private sector to create wealth. With 50m SMEs in Africa, he sees giving small businesses access to finance as vital.
The third area that Adesina is passionate about is jobs: and that means building skills, supporting business and entrepreneurship and addressing the skills mismatch. The fourth issue, which is clearly very close to Adesina’s heart, is reviving rural economies for inclusive growth.
Finally, he cites the importance of regional integration, to share prosperity and create larger markets, with better infrastructure to connect our countries together and integrate with international markets.
But Adesina has other concerns, including the increase in fragility in many countries. “On the continent, the number of states that are fragile are today 53% of all the regional member states, so the kind of skills that are required to meet these daunting challenges we’re having to face is more than just finance.”
He is not worried that he does not come from a conventional banking or finance background. “I bring a lot of experience and expertise in development finance, in rural development and also development policy, in funding and investment, in partnerships and have built massive resource mobilisations throughout my career,” he says. “When it comes to the
issue of finance I’ve actually worked throughout my career in helping to get financing to Africa, including working with banks from Tanzania to Uganda to Kenya to Ghana to Nigeria, mobilising over $4bn of lending from banks into agricultural SMEs.”
Looking at his own country, he says that over the last three-and-a-half years, his ministry has helped to mobilise over $5.6bn of private sector investment into the agriculture sector. He posits that his track record makes him an ideal candidate to assume the responsibility of the AfDB’s presidency. “These are the sets of skills that are needed to actually do this and I think I’m very well prepared for this job.
“If you take a look at what the bank needs, in particular for investment in infrastructure, it’s massive. Africa needs
to raise roughly $93bn a year to meet that infrastructure
challenge, and that money is going to come from three sources.
“It’s going to have to come from governments, it has to come from official development assistance [ODA], and it has to come from the private sector. I’m a private sector person and that’s where I have worked for most of my life.
“If you look at the infrastructure investment from the private sector today in Africa it’s roughly $14.8bn a year, but the problem is this $14.8bn a year is going principally to only three countries, it’s going to South Africa, it’s going to Nigeria and it’s going to Ethiopia.
“Even when you take the entire ODA financing in Africa, it’s over $10bn from the World Bank and the AfDB, 85% of that is going into five countries, it’s going into South Africa, Nigeria, Ghana, Ethiopia and Kenya, so what happens in the smaller states? What happens in the fragile states? This is exactly where I have the experience.”
Asked to explain what that experience was, he said: “When I began to work on innovative financing for agriculture in Africa nobody felt that agriculture was a viable sector but I was able to mobilise $4bn of investment by sharing and developing innovative risk-sharing facilities with the largest banks in Africa, all the way from Uganda, Tanzania, Kenya, Mozambique, Ghana and to Nigeria.
“And if we can mobilise $4bn for the most difficult sector, you can imagine what can be done in easier sectors, like telecoms, or energy, in terms of structuring finance for those areas.”
He links his experience in Nigeria’s agriculture and rural affairs ministry with what he believes should be done for the fragile states of Africa. He starts with the view that fragile states have the greatest difficulty in attracting public capital, but should he be asked to take on the responsibility of leading the AfDB, he proposes to develop regional risk-sharing pools.
“If, for example, we take the Sahelian region, because you have a lot of synchronous risk in that particular place, the risk sharing pools will be developed, and even the countries themselves will put in money. The AfDB will put in money, the donors will put in money, and basically you can almost run a project on a first loss basis [an instrument designed to insure the amount of capital which is exposed first should there be a financial loss on a security] and create a risk facility to get the private sector to tilt towards those countries.
“When it comes to the underfunded sectors of Africa, you’re looking at water, health and sanitation, which the private sector is not going to do a lot in, or you look at the fragile states which public capital is not going to be attracted to; my experience in agriculture is exactly what I would apply to these areas.”
Adesina can point to a number of successful initiatives in this area. Before becoming Nigeria’s minister for agriculture and rural development he was AGRA’s vice-president for Policy and Partnerships for five years. During those years he helped farmers and agro-dealers in Ghana, Kenya, Mozambique and Tanzania access over $100m in finance through the use of innovative financing instruments.
He also worked to design the risk sharing facility for the Central Bank of Nigeria, which leveraged $3.5bn of lending from banks to agricultural value chains. After becoming a minister he developed a $100m private equity fund for agricultural SMEs, attracting funding from Nigeria’s Sovereign Wealth Fund and the German development bank KfW (formerly KfW Bankengruppe) as well as the Ford Foundation.
“I remember when I worked with Standard Bank in South Africa and I asked them to lend to agriculture, the chairman of the bank looked at me and said, ‘What are you talking about?’ I said, ‘But this is where the value is, the whole thing is about risk’, and today they have lent well over $100m into smallholder agriculture.
“I can structure these kinds of deals and mobilise capital in a smart way.”
Having lived and worked in a number of Francophone sub-Saharan African countries, such as Mali for ten years, Guinea, Cote d’Ivoire and Cameroon – and worked with banks like Centenary Development Bank in Uganda (which was
not lending much to agricultural SMEs until he helped put in place risk sharing facilities); and the National Micro-finance Bank in Tanzania; Equity Bank in Kenya and Stanbic in Ghana – it is obvious that he has extensive experience in Africa’s banking sector and structuring innovative instruments, gained from across the continent.
“As Nigeria’s agriculture minister, my relationship with the AfDB has been excellent. Earlier in my ministerial term, Donald Kaberuka asked me to address the executive management of the board and I have worked closely with the Bank. I am a knowledge partner of the bank as much as somebody who has received the assistance of the bank.
“I remember telling the AfDB at that particular seminar that infrastructure in rural areas is important but you can’t execute infrastructure in an isolated manner. I also outlined my team’s work in creating The Staple Crop Processing Zone Programme, an initiative where we would attract the private sector to come into the rural economic space and set up food manufacturing plants to process and add value to everything that Africa produces in rural areas and then the government operates power infrastructure, water and roads. That would reduce costs. The AfDB bought into it right away.”
Asked about the Bank’s triple A credit rating and whether he was a risk taker, he said that preserving the bank’s capital was crucial, but that the bank should not be afraid to take sensible risks, pragmatic risks to achieve developmental impact.
“The bank is going to be judged in terms of how much it has been an instrumental institution in achieving developmental outcomes and so the bank should take sensible risks to move the envelope, to get this massive inclusive growth that we need in Africa.
“Development is not just about getting money out of the door. I learned that when I was at the Rockefeller Foundation where I was in charge of managing a dead man’s assets! My responsibility was to use that money for what John D. Rockefeller intended it to be used for.
“It’s the same with the AfDB. The success of Africa should not be judged by the rate of return on private capital on the continent, as important as that is, it must be judged by the social capital stock formation on the continent.
“That is, in terms of how things are changing in the real lives of people, in terms of infrastructure, in banking, jobs, in terms of opportunities in rural areas, in terms of opportunities for SMEs and for women. That is real development. We must work together to make that happen.”