Strengthen AfDB’s Capacity To Prevent Bad Loans, DBN Boss Urges Adesina

The newly re-elected President of the African Development Bank, Mr Akinwunmi Adesina has been urged to strengthen the capacity of the bank to avoid having huge Non-Performing Loan portfolio as a result of massive project execution.

The Chairman, Development Bank of Nigeria, Dr Shehu Yahaya said this on Friday during an interview on TVC News Business Nigeria monitored by THE WHISTLER.

He spoke on the theme; “AfDB Leadership: Emergence of Akinwunmi Adesina as President for Second Term.”

Adesina had emerged as the AfDB President on Thursday, after he scored 100 per cent regional and non-regional votes.

Since taking over at AfDB in 2015, he had introduced several innovative reforms as well as a restructuring of the bank, including setting up offices in several African nations to get closer to its clients.

Be also set up an Africa Investment Forum that has attracted $79bn in investment interests into projects in Africa between 2018 and 2019.

He successfully led a historic general capital increase campaign that culminated in the Bank’s shareholders raising the institution’s capital from $93bn to $208bn, in October 2019.

Yahaya said that the need for the new AfDB Boss to strengthen the risk mitigating capacity of the bank was based on the fact that with the rasing of the bank’s capital base by about 125 per cent to $208bn, it’s ability to finance more projects has been increased

He said with this increase in funding capacity, there are so much developmental programmes that would be implemented across various countries in the region.

He said if the current risk management mechanism is not strengthened, there is a likelihood that some of the loans given for the various developmental programmes might go bad.

He said, “Going forward, what I will like to advise the President of AfDB to strengthen the capacity of the African Development Bank itself as an institution because as you know, the Bank under Adesina is rapidly expanding investments in all parts of Africa.

“If you rapidly expand your investments, what it means is that you run the risks of a higher ratio of non performing loans.

“To be able to guide against that, the bank has to substantially increase its capacity to monitoring and implementation of projects that it is implementing so that substantial positive results can be derived from the increased investments in Africa.

“It will help the bank to be more effective in boosting the quality of life for Africans.”

During his first term, Adesina had set  five development priorities for the institution. They are light up and power Africa; feed Africa; industrialize Africa; integrate Africa; and improve the quality of life for the people of Africa.

Through the programme, the bank had been able to facilitate finance from private investments to 15 million people, while providing access to improved transportation to 101 million beneficiaries.

Also, the bank had helped in providing water and sanitation to 60 million beneficiaries, while also assisting 335 million people to have access to electricity.

In the area of agriculture, about 141 million beneficiaries have been empowered to boost food security.

With all these achievement, Yahaya said the AfDB boss should focus more on power, Transportation, agriculture and health infrastructure.

The DBN Chairman said while power and transportation are critical to the industrialisation agenda of the bank for Africa, there is need for massive investment in heath infrastructure to support the capacity of African countries to respond to the negative impact of the Coronavirus pandemic.

He said there is need for improvement in monitoring and evaluation as well as supervision of projects to achieve the desired objectives of the bank.

He also urged the AfBD boss to take steps in resolving any division that might arise among member countries of the bank who felt aggrieved as a result of his emergence.

He said the reconciliation was vital so that the bank can have a much more solid and united institution to support its developmental objectives.

A group of whistleblowers had, in January 2020, raised 16 allegations of ethical misconduct against the AfDB President.

The allegations were reviewed by the Bank’s Ethics Committee of the Board of Directors in March, and were described as “frivolous and without merit.”

The findings and rulings of the Ethics Committee were subsequently upheld by the apex Bureau of the Board of Governors in May, which cleared Adesina of any wrongdoing.

But not satisfied with the outcome of these findings, the United States again raised objections and called for a further review.

The Bureau of Governors of the AfDB set up the Independent Review Panel to review the process by which two previous organs of the Bank – the Ethics Committee of the Board, and the Bureau of the Board of Governors – had previously exonerated Adesina.

Members of the high-level Independent Review Panel include Mary Robinson, a former President of the Republic of Ireland; the Chief Justice of the Supreme Court of Gambia, Hassan B. Jallow; and Leonard F. McCarthy, a former Head of the Directorate of Special Operations of South Africa.

The Independent Review Panel has however said that it “concurs with  the (Ethics) Committee in  its  findings  in  respect  of  all  the  allegations  against  the President  and  finds  that  they  were  properly  considered  and  dismissed  by  the  Committee.”

The Panel, in its report, vindicated Adesina, declaring that it had “considered the President’s submissions on their face and finds them consistent with his innocence and to be persuasive.”