Former World Bank Treasurer Arunma Oteh has gone into bat for her former colleague Akunwumi Adesina the under pressure president of the African Development Bank. Oteh – now an academic scholar at the University of Oxford- spoke to Kenneth Igbomor of CNBC Africa’s Lagos bureau.
CNBC Africa: Your take on the recent developments at the African Development Bank?
Arunma Oteh:“Indeed I’ve worked for the African Development Bank for 17 years in a variety of roles and also as you’ve mentioned, most recently as Group Treasurer for the World Bank for little over 3 years. I do think that the issues that has developed are unfortunate. Particularly because of the difficult times that the world is facing in respect to Covid-19. Also I’ve known Dr Adesina, the President of African Development Bank for several years and I can attest to the fact that he’s not only a great leader but he is a man of upmost integrity.
Most recently, when he was Minister of Agriculture, I was the Director-General of the Securities & Exchange Commission in Nigeria, and he and his team worked with my team and I on leveraging the capital markets to transform the agricultural sector of Nigeria. But I think also important is that we cannot lose sight of the fact that the African Development Bank and multilateral banks generally add credible institutions and highly rated in parts because of the best practice governance and stringent processes. In fact the African Development Bank has more rigorous processes in many cases then some of the other development banks. So let’s take one issue is a critical governance issue which is a selection process for the leadership of the bank.
If you take for example the Asian Development Bank, its President has always been Japanese – its largest shareholder. The World Bank – whose largest shareholder is the United States – the President has always been since 1947 when the World Bank has been established – has always been an American. For the African Development Bank it’s different. The process is a competitive, rigorous process that allows any candidates endorsed by their own country from any of today’s 55 African countries to contest for the elections.
Indeed, Dr Adesina is the first Nigerian that has ever been President of the African Development Bank since its founding. Even though Nigeria is its largest shareholder and so for 50 years because of this process that allows all of the shareholders that are African to submit a candidature, it is a much more rigorous and competitive process.
I was in my last role at the African Development Bank – Vice President of Corporate Services, and therefore as Vice President of Corporate Services because I was responsible for human resources, for Information Technology, for Administration, for Procurement, for Language Services, and had administrative oversight of the offices around the continent. So I was very involved in hiring processes in procurement and I can also attest to the fact that these processes are by design and by practice very rigorous and involve several levels of decision making.
So by the time something gets to the desk of the President of the African Development Bank it’s gone through rigorous processes. There is also feedback mechanisms to continue to ensure that these governance and best practices and processes remain best practice. I think also important to highlight is that Multilateral Development Banks have been the bastion of collective decision making processes at all levels, I mean if you’re hiring somebody there’s a multi-disciplinary team across departments that get in the selection process – there are different levels in the hiring process. If you take – and for me it’s very representative of one of the essence of what Africa brings to the table – collective collaborative decision making. And if you take for example the fight that I think was had in either January or February that the African shareholders decided through the African Union, through the heads of state that they would endorse Dr Adesina as their sole candidate for the elections which I hear will be held in August this year.
His two predecessors were also re-elected by acclamation. So this principle of collective decision making of best practice – governance practice – is something that’s associated with the African Development Bank and other development banks. I have had the privilege working in a variety of roles, rising through the ranks. I’ve worked as a loan officer, for West & North Africa as a funding officer, as a portfolio manager, I’ve ran the trading route, I was Treasurer of the African Development Bank, I was Group Vice President of Corporate Services so I’ve worked in operations, I’ve worked in Treasury, I’ve worked in administration.
But as you’ve also mentioned I’ve also worked at the World Bank, most recently from 2015 to 2018. And I can assure you the Multilateral Development Banks are absolutely an amazing institution. They are well-run and they have great impact on society as people have seen and in particularly on the African continent. What I don’t like about them is this pattern of making frivolous allegations of a sitting President just before an election.
I’ve worked with three presidents from 1992 to 2009 when I left the African Development Bank and each of them experienced this. I’ve worked with the President at the African Development Bank (at the World Bank) and he also experience this. So the shareholders must find a way to try and make sure that they stop this issue of these frivolous allegations in trying to undermine the leadership of an institution that’s trying to make a difference on the continent.”
CNBC Africa: I am still trying to understand type of signaling that it gives on the state of governance systems for AAA premise to show, like the African Development Bank, to take the option of an independent probe on cause of a shareholder after the conclusion of the same process by the board of governance.
Arunma Oteh: “What I would like to share with you is that first and foremost, there are rigorous processes and by the time something gets to the board of Directors and the ethics committee has reviewed it; it’s gone through a lot of processes. So I have no doubt that the work of the board ethics committee has been rigorous. But I think we need to go back to something that is unique in terms of the context of the establishment of the African Development Bank. I don’t know if you know this, it was conceptualized by African financial luminaries led by Romeo Horton – the late governor of the Central Bank of Liberia in the 1960s. Their vision was to establish a first class African Institution that will mobilize resources for Africa.
It was also one that ensures that Africa has a leading voice in its economic development. African Development Bank started its operations I think in 1964. It was a decade later that non-African countries joined through the establishment of the African Development Fund which was modelled after the World Bank Group’s international development association. The non-African countries did not join the bank until 1982. So almost two decades later. That said the African Development Bank remains an institution where everybody comes together to focus as a group in advancing Africa’s economic development agenda.
And today I know that there are 81 shareholders. Last year, in that collaborative and cooperative nature there was a replenishment of the fund, there was a capital increase. And I think this is a show of confidence not just by African countries but also by the non-African country shareholders of the excellent work that Dr Adesina and his team have undertaken in the last 5 years. I, of course have looked on with interest and their many, many achievements. Transforming the power sector, revolutionizing agriculture, but importantly putting youth and women at the centre of development. I’ve been struck also by some of the very important initiatives that catalyze resources by the private sector that bring partnerships between the public sector and the private sector. Initiative like the African Investment Forum, which in a short term has catalyzed a lot of resources for the African Development Bank and for Africa’s development more so.
But it’s also focused on trying to make sure that those issues that prevent the acceleration of Africa’s development at tackled that government, private sector and the honest brokers, development banks like the African Development Bank, like the Europe Investment Bank, like IBRD, the Development Finance Cooperation of the United States that they all at the table trying to make sure that the environment that support Africa’s development is taken account of.
I’ve also been struck that this has not distracted Dr Adesina and his leadership team because I’ve seen what they have done in respect to responding and supporting African countries in response to the Covid-19 crises. And I do think that this is extremely important given the difficult times that we face. Permit me to also use this opportunity given to appeal to shareholders and particularly to the Ministers of finance who comprises, who gather the most senior decision-making body of the African Development Bank, the board of governance to speedily bring closure to this issue so that Dr Adesina and his team continue to do the great work that they’ve been doing in supporting African countries at this critical time. I mean these are unprecedented times in terms of the Covid-19. Dr Adesina is someone of the highest integrity. His track record over his 35year career shows that.
The African Development Bank has always had rigor, continues to improve its governance practices, a board, the leadership of the institution, the various organs, the independent mechanisms within the organization, the internal auditor, the inspection mechanisms that report directly to the board. So these institutions are rigorous in terms of cooperative governance. I was the head of the Capital Market Regulator in Nigeria so issues of cooperative governance, understanding where private sector institutions stand. The quality of governance of these institutions are extremely world class and particularly the African Development Bank.
So my appeal really is that we dispense of this issue. That we stop this culture of frivolous allegations around the times of elections. And allow the African Development Bank to support the African continent at this important time.”
CNBC Africa: I would like to look at Nigeria now as the bank’s largest shareholder and try to understand the level recommendations you would have for the Nigerian authorities if they going to response to this issue.”
Arunma Oteh:“I think there is a lot put out by the media and I think that’s one the things that is a bit unfortunate that because of social media there is a lot of amplification of issues. So issues that the governors would’ve taken care of themselves than come out in the media then all of us get to talk about it. So in the media the absolutely well-articulated letter that the minister of finance Ms Zainab Ahmed wrote to the chair of the board of the governor, so the Minister of Planning for Ivory Coast, and she clearly articulates what is clear and I don’t think it’s just a Nigerian position I think that is a position of anybody who understands the governance processes of institutions, Multilateral Development Banks. So I think Nigeria has taken the steps that it should take. I think even important is the collaborative nature in the way that African nation operate because I understand that these allegations were made in January. I think in early February the African Union, chaired by President Cyril Ramaphosa, still endorsed Dr Adesina for the elections. The 55 African countries all of them together. And these people will not endorse who they think is not of integrity, who they think have made riches.
So my message is that we need to allow Africa to turn this Covid-19 crises into an opportunity. There is a lot of work that need to be done. There’s a lot of issues to manage. And this is my message to you, to Nigeria, to Africans, to the non-Africans who have been extremely supportive of this institution including the United States which is the second largest shareholder of the African Development Bank.”