It has become de rigueur for speakers at Africa-focussed events to preface their comments with the observation that so much has changed in the global situation that African countries can no longer rely on the same partners or the same playbooks that they have for much of the post-independence era. This week, as shareholders, government leaders and various shareholders gather in Brazzaville, Congo, for the annual general meetings of the African Development Bank, observers will be looking to see what signals the continent’s preeminent development institution will be sending and what that means for its transformation agenda.
This year’s meetings will be the first since Dr Sidi Ould Tah took over as president of the bank. A former minister in his native Mauritania who led the Arab Bank for Economic Development in Africa (BADEA) prior to his election, Tah campaigned on a campaign based on “4 Cardinal Points,” namely enhancing access to capital, reforming African and global financial systems, harnessing the continent’s demographic advantage and building climate-resilient infrastructure.
The meetings will provide an opportunity for Tah to procure a buy-in from his board of governors for his ambitious agenda. He has momentum on his side. At the Africa Forward Summit in Kenya earlier this month, Tah secured backing from African leaders for New African Financial Architecture for Development, a new coordination framework that the bank is championing. The bank says NAFAD will help mobilise and direct some of the $4 trillion in domestic savings held in Africa to close the $400bn in annual development financing that the continent needs. At a meeting convened in April at its headquarters with key players from African finance, it was noted that, currently, Africa is a net exporter of capital, with many of its reserves sitting outside the continent. NAFAD will aim to make African capital work for Africa, through better harmonisation, organisation, and regulation, alongside the necessary vehicles through which to channel this capital. The Bank aims to be the coordinating and in some cases the implementing arm.
Just as significant is the decision by the bank to increase its stake in African Trade & Investment Development Insurance from 4% to between 14% and 15%, which will further capacitate the agency to provide risk insurance for bigger ticket investments on the continent. Historically, African countries have had to contend with the perception of instability and an expansion in ATIDI’s capacity will help encourage investment, reduce financing costs and improve project bankability.
Tah has also made scale a key plank of his agenda and the announcement of a €450m partial risk guarantee for the OCP Group is an indication of the type of larger instruments the institution is set to pursue under his leadership.
Reforms inside the bank may also come under scrutiny at the meetings. One of Tah’s campaign commitments was to reduce project approval timelines from around 18 months to as little as 3 months. While his predecessor, Akinwumi Adesina, is seen to have succeeded in easing some institutional bottlenecks and accelerating aspects of decision-making, many within the bank acknowledge that the process can be streamlined further.
This will come as good news for sovereigns and institutional clients of the bank in an environment where the speed of decision-making is itself a critical element of project success. Also among the anticipated reforms is a pivot to an operational model similar to that of the World Bank Group, which is expected to improve clarity and streamline accountability.
The meetings will also perhaps cap off the period of listening and consultation that Tah embarked on following his election. Even before his election, Tah told this magazine that he expected to spend the first 100 days of his tenure “to better [understand] the bank”. Nine months after his investiture, Tah appears ready to put that understanding to work.
In winning the backing of the board for his reforms, Tah will have some assistance from the febrile global environment which, as any observer would tell you, requires the continent to take drastic actions urgently. This growing acceptance, along with the goodwill accumulated by its new leader, may provide the 61-year old institution with the capital it needs to push through a more ambitious agenda than it is currently used to.