Race for AFDB Presidency: Nigeria’s Adesina Spells Out Vision
Mutizwa: What are your solutions to the key risks impending Africa’s growth?
Adesina: As president of the Bank, one of the first things that I would do which comes just naturally to me because that’s what I have done for over twenty-five years of my career is to build very strong partnerships and ensure that Africa is able to broaden those partnerships. I think foreign direct investment is critical for Africa’s growth and looking at it today, the foreign direct investment in Africa is roughly about fifty-six billion US Dollars and that has grown from about forty-five billion US dollars just about two years ago. China plays a very important role, China is Africa’s largest trading partner today and if you look at most of our economies, infact for the entire continent, for instance, in year 2000, only 0.1 percent of the total GDP of Africa in terms of trading with China accounted for that, 0.2 percent by total GDP growth and 0.5% in 2013 so that tells you how big China has been. Looking at actual values of trading between us and China just in the year 2000, it was only eleven billion dollars and when you look at it in 2013/2014, it was one hundred and ten to one hundred and thirteen billion dollars, so China has a great role to play in what happens to our economies but this has always been largely driven by commodities. A lot of it has been oil and gas, a lot of it has been copper and other minerals that we had. Well the fact is that it has helped other African countries to actually grow. Well, a challenge is the over dependency on raw commodity prices export. I think that today, if you look at the growth figures that are projected, China’s economy would grow by 6.5 to 7.5%. That’s still a great growth but much lower than the earlier projection, which means you have excess industrial capacities and savings in China and also because of the reduced industrial growth in manufacturing. There are countries that are actually highly exposed. Those that are exporting raw commodities to China like Angola, DRC, South Africa and Zambia. So that will have implications in terms of fiscal and macro-economic stability for those countries. There are also other countries that rely on China’s foreign direct investments. But China is big in Africa. Of the total amount of 41billion dollars that China gives as direct investments, 47% of it has been in Africa, so if you pick other countries that are so dependent like South Africa, Angola, Zambia and even Nigeria, my country is dependent on that, so you will feel that impact. However, there are two other dimensions that we must not forget; the economies that have actually relied more on regional markets are the ones that are actually more boisterous and less likely to face the downside risks of the slowdown in the growth. For instance Senegal, Uganda and Kenya have actually placed a lot more emphasis on regional markets; these countries are less exposed but if you take other economies like Ghana that actually send a lot of their exports to the European Union where their exports may account for as much as67%, even Botswana and Namibia are also examples – these economies are less likely to face a lot of the downside risks. The implications of these for Africa from the perspective of the AfDB is that it is very crucial for African economies to diversify. We must diversify away from just relying on primary commodities because of the volatility in commodity prices. Secondly, we must build heavily on building regional markets. We Africans trade among ourselves the least, only 12% of trade goes on between us as African countries.
Mutizwa: Absolutely, compared to 70% among the Europeans…
Adesina: Actually almost 80%. If you look at the Asian Countries, it’s well over almost 50%. Africa needs to trade. We need to build a bigger market for ourselves in Africa and thirdly I think we also need to build domestic markets for ourselves that actually allow us to grow or just simply export. In particular for me, if I am elected as the President of the AfDB, I would put a lot of emphasis in helping those countries that have natural resources, I don’t believe in a natural resource cause argument because today Norway, has…
Mutizwa: It has had oil for years
Adesina: Yes. So what really happens is how you manage it for development and so the whole issue of beneficiation, of adding value to every single thing we have in that market is very important, not just exporting. You can take your natural gas and turn it to ammonia and do all kind of things and finally, I think, the most important thing we also have to do is just build the skills. I’m delighted with what Botswana is doing with their diamonds in collaboration with De Beers, that’s a fantastic thing to do. We need to do more of that; build skills and capacity for us to know what we have. One of the things I would like to pursue is to develop an Africa natural resource map which allows us to know what we have and the amount that we have and also to help countries from the advisory capacity from the bank to manage their natural resources better, so you can have sovereign wealth funds that allows you to cushion your exposure to volatilities like this. So it’s a comprehensive thing. I think the bank is well positioned to do that but as somebody who believes a lot in the integrated approach to things, I think we have to help all of our countries, the small countries in particular that are going to be so much exposed to it have to be helped tremendously to further that as a part of the economy and I would pay a lot of attention to those small countries.
Mutizwa: Absolutely, Minister, I will say, break down those colonial boundaries and I think there are times when we forget that they are not our boundaries but these are boundaries that were imposed many years ago. So Minister, this field you are facing is a very strong field. Eight candidates that we are talking about. We’ve got five candidates coming out from West Africa, one candidate from Southern Africa, One from East Africa and one candidate from sort of Central Africa but more from West Africa. When you rate your prospects, do you think you will be able to overcome these candidates and on what basis?
Adesina: The very fact that you have a race in which very distinguished Africans are participating is a fantastic thing. It just tells you how important this institution is. Everybody wants to really bring the whole mix of experiences that they have to make Africa better. That’s the way I see it. In particular for me, that’s what I bring to the table. I think it’s the fact that I know Africa very well and infact I only started working in Nigeria just four years ago when I was appointed by the President as Minister here. Whether it is from Tanzania to Uganda to Rwanda, to Kenya where I spent several years, to Malawi where I helped the late president of Malawi tremendously, whether it is working with central bank Governors and Finance Ministers all the way from Uganda to Tanzania to Mozambique to Ghana over years to develop risk sharing instruments, to lend significantly to the rail sector or is it in Mozambique or your country Zimbabwe to Mali, to Niger, to Burkina Faso to Chad and places where I have actually lived, worked and interacted tremendously. I bring to them a tremendous amount of knowledge, global partnerships to help the bank to deepen its partnerships with the World Bank, the IFC and other multilateral institutions including recently the BRICS which is a very important facility to have. But more than that, I am a development economist and I believe that with my broad experience which covers financial management, economic policy as a member of the Economic Policy Management group in Nigeria, which is the highest decision making body on policy management in the country, I have partnered very actively in looking at the economic investment and financial policy for the sectors that go all the way from ICT to housing to infrastructure, to urban development, to health, to education, to agriculture and extractive industries. So my experience is actually very broad and with that, I believe that I would make a great president for the bank. I will build on what my friend Donald has done and other previous presidents like Babacar N’diaye, Omar Kabbaj and all the others that have done great things for the bank. So that’s what I bring. More than anything else is the fact that I want to serve Africa and I’ve got the passion to do that.
Mutizwa: I was teasing you when I came in and I said that you are going to live your life in a suitcase for the next two months but I’m sure you would be doing exactly that. Now you obviously have done your maths and you would have targeted whoever you are targeting, when you are looking at the field, who do you think is your biggest rival?
Adesina: Well, I think that it’s going to be an interesting race. But you know it is important to recognise that as Africans, Africa is my home and I’m at home everywhere in Africa and I look at the situation with Ebola for example and I lost a lot of sleep in that situation because I knew how hard President Sirleaf Johnson was working. I knew how hard they were working in Sierra Leone, how hard they were working in Guinea. Infact, I did work in Guinea where that particular situation had occurred. I worked in Bumpe River of Sierra- Leone so I know those areas. I feel that if given the chance as President of the Bank, these economies that were actually doing quite well before but have been hit by the shock, need to have a greater or fragile states window to allow them to cope with the impact of the shock but also to allow them to make the critical needed social investments in their economies. So for me honestly, small countries where I’ve lived and worked all my life need support and I believe the development of these countries is more important than that for a big country. I believe in building these small countries and expanding opportunities for them – that’s the way things have to be and under me, that is exactly what I would do.
Mutizwa: One of the issues that has come up is that some small countries actually feel that you don’t need a big country to occupy the highest office in the biggest development finance institution of the continent. Do you think that would work against your chances? Coming from Nigeria, most populous country, largest economy, one of the fastest growing in Africa…
Adesina: Let me just tell you something. You get on a plane, you are flying to Europe, Mombasa or anywhere, you just want a very good pilot. You don’t go ask them whether they are from a small country or big country. You want a very smart person, someone who has the passion, the vision, the commitment to drive them to work with the stakeholders of the bank to make it a more impactful bank that is efficient in delivering a developmental impact. Nations are not the ones that run the bank, individuals do and deliver value for their shareholders. So I am very encouraged and excited about my candidacy across small countries to big countries and more than anything else, as president of the bank, people sometimes think that it is the president alone that runs the bank. The president works with the board of governors, all the finance ministers and all the directors of the bank and works with staff. So it’s not about you, it’s about running an institution and delivering it to have inclusive growth and development effectively all across the continent.
Mutizwa: I’m going to ask a question that I’m sure you will not answer anyway. But I have to ask. Looking at the regions I mentioned earlier and you imagine that East Africa will back Minister Sufian and also that Southern Africa will back
Sakala from Zimbabwe but you will be scheming probably beyond that and thinking beyond the first round, but do you see yourself making the second round?
Adesina: Absolutely, I believe so.
Mutizwa: Who will support you in that scenario?
Adesina: Well, I believe that to get elected as president of the bank, you need to work effectively with all countries, by the way, not separate countries based on who they support or who they do not support. As someone who is running for the President of the African Development Bank, even folks that don’t vote for you, they are members of the bank so I have to make sure that the African Development Bank works for them, make sure the African Development Fund works for them and that would be what my role is and all African countries are going to benefit. I would develop every single part of Africa and that’s my message and when I go to countries. We are talking to people and we are making very great headways in that. I think you will find out at the end of the day.
Mutizwa: Are you visiting the world…
Adesina: Let me just say I have been on a whirlwind tour. It’s going well. It’s going to be very hectic. You said it, that I have my bags packed; I am living in a suitcase but what better thing to do? It is really a high privilege to be given that opportunity to run a development bank to create new hopes and aspirations on the continent; to build on what have been done. I am excited about that. I think when it comes to positions, they only matter not because of you occupying it but because of what you do with it. In this particular case, to ensure inclusive green growth for the continent, to work with our partners, the regional member countries, the non-regional member countries. These are the shareholders of the bank and the private sector and the civil society. They are very crucial and that is the task of the president of the bank.
Mutizwa: Very quickly; what are you preaching to the non- regional donor countries, the EU, the Americans, the Japanese, the Asians?
Adesina: Let me just say that I think that the bank is very fortunate to have actually opened up to the non-regional partners. They are a very significant part of the bank. When you look at what Africa needs to develop, the fact is that the public side of the African Development Bank has got a lot of support but today if you look at what the trend has been, it has been more on the private sector. You look at the sovereign wealth fund, the pension growth, the diaspora bonds and how they are going; at how the financial and capital markets are working, the growth of the private equity funds on the continent; so you come to a conclusion that infact we need to grow even the partners. So that is how I look at the bank and I think these are all the stakeholders that are going to matter in an election for the president of the bank.
Mutizwa: About a couple of weeks ago, I was talking to someone at a think tank – Covington-Burlington – and he said the bank needs a visionary, a person who will be able to build on the work that Donald Kaberuka, who has brought a lot of respect and credibility to the bank through sort of big thinking as well as addressing the management and micro-issues the bank was facing when he came in; as a leader, how will you achieve that?
Adesina: The great thing with leaders is you have to have a very clear vision and I think I’ve tried within the shortest possible time to give that. I am always a visionary and if you have a vision and you don’t deliver, that is a dream and not a vision. I have a great vision, I have always delivered, and execution is what matters. I would thrive in working with the staff and building the capacity to deliver even greater value for the bank. As I said, Kaberuka is a dear friend of mine and I have the greatest respect for him, so I would build and consolidate on what he has done for the bank and take this bank to the next level in terms of what developmental impact should really be. My style of leadership is really actually leadership based on results. I think what matters at the end of the day is the results and by the time people put in money into a bank, basically I have to make sure that I get capital off the bank and have to ensure the triple A rating of the bank. And so the bank is actually quite a great bank. Liquidity of the bank is fantastic. Donald Kaberuka has done a fantastic job of that. It is now really about how do we deploy the capital and manage it better for development objectives. We are at the same time seeking to make sure that it is done very effectively. I also believe that one of the things that is going to be really critical in my own management style is that I believe in managing people, the greatest assets of a bank are its staff; they are the ones that actually go around and fly around the very difficult areas to develop projects and bring to the board of governors for them to approve. I would actually build that and I have done that in Nigeria. I lead a group of over fifteen complex institutions and parastatals in Nigeria. The total staff strength is over seven thousand people and we’ve been able to deliver this tremendous amount of value to Nigerians and so what I bring is a very deep knowledge of the public sector. I have a very great knowledge of private institutions as well and I have worked with global institutions so I’m able to bring all of that together to make sure that the bank can deliver value, add skills, be very well managed, focus on results and execute as a bank for Africa.
Mutizwa: Some people suggest that Donald has brought to the bank a presidential air like in terms of how he has conducted himself and how he has conducted the affairs of the bank but when we look at you as a young person with dreams trying to get into a world of studying, did you always seen this path to the AfDB?
Adesina: Well actually, I grew up in the rural areas. I grew out of poverty so I know poverty is not about statistics, it’s about real people. I lived, went to a village school where we had to walk for several kilometres to go find water. I used to be quite ill because of malaria so I know exactly what that means, I have taken bad water, had diarrhoea and I know the importance of doing that. I have lived out of neighbourhoods where we barely had good sanitary facilities. With the whole issue of organisation today, all across Africa from Nairobi to Lagos to many of our other cities, we have a lot of bourgeoning cities, bursting at the seams because a lot of them have nothing but just islands of wealth, oceans of poor people, slums everywhere. But if you look at how Africa will develop and grow in the future. We have to make sure that we can provide water, sanitary facilities, social areas, housing and mortgage financing for people in the cities. We need infrastructure to make our cities more resilient, make them actually climate resilient for green growth. What we do with our cities is actually very important. It all really comes down to giving hope. Giving hope for a better Africa, a more inclusive Africa, Africa where people feel comfortable. What better institution to get the Africa we all want? I can’t think of any other than the African Development Bank. With all of my heart and passion, I will serve Africa.