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The CGD Podcast
African Development Bank Presidential Candidates – Scott Morris
00:17:28
“It’s nice to have a list,” CGD senior fellow Scott Morris told me about the shortlist of eight candidates for the Presidency of the African Development Bank. He was giving credit to the Bank for holding what appears to be a truly...
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- [00:03]
A
Hello and welcome to the CGD podcast with me, Rajesh Merchandani. Today we're talking about elections, specifically the election for the presidency of the African Development Bank, a key multilateral institution. Since it was founded in 1964, it's financed almost 3,000 programs and operations totaling some $50 billion. In 2003, it it was given a triple A rating by major credit ratings agencies. So it's kind of a big deal. How big a deal, though, is the presidency? The person who leads it to discuss this with me is CGD Senior Fellow Scott Morris. Hi, Scott.
- [00:40]
B
Hi, Rajesh.
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A
So let me just ask you that. How big a deal is the African Development bank festival?
- [00:46]
B
The bank is a big deal. It's a big deal for the region. And in fact, it matters a lot because of the legacy of strong presidential leadership. And certainly the outgoing president and his predecessor have done a lot to establish the bank as a highly visible and impactful institution in the region.
- [01:06]
A
Well, Donald Kabaruka, the outgoing president, is stepping down. As we know he will be replaced. We have an idea of who that person will be because the short list of eight official candidates has now been released. Let's take a listen now to who is on it.
- [01:22]
C
Akinwumi Adesina, Minister of Agriculture and Rural Development, Nigeria Sufian Ahmed, Minister of Finance and Economic Development, Ethiopia Jalul Ayed, former Minister of Finance, Tunisia Corje Bedumra, Minister of Finance and Budget, Chad Christina Duarte, Minister of Finance and Planning, Cape Verde Samura Kamara, Minister of Foreign affairs and International Cooperation, Sierra Leone Thomas Sakala, former Vice President, country and Regional Programs, African Development Bank Birama Bubakar Sidibe, Vice President, Islamic Development bank so that was the.
- [02:06]
A
Short list of candidates for the presidency of the African Development Bank. It will be decided in elections in May. CGD's very own Scott Morris is here to talk about it with me. Let's get your reactions to that list. First of all, Scott, we don't want to go into it name by name. We don't want to prejudice any candidates. And, you know, there's plenty of time to talk about their individual pros and cons in the weeks ahead. But just give me your reaction to, like, the spread of the list.
- [02:30]
B
Sure. Well, first, it's nice to have a list and we have to give credit to the bank for having a transparent process and a list of candidates that we on the outside can look at as sort of, in a broader sense, stakeholders in the institution. And as I look at this list, it's remarkable for its regional diversity. I mean, it really covers all the major regions, sub regions of the continent, North Africa, west, east, including small island countries. I mean, it really is impressive. I think it speaks to how much the institution is valued that leading countries in each of these regions have saw all fit to put forward a candidate.
- [03:14]
A
Not much of a gender balance on that list, though.
- [03:17]
B
No. Clearly there it does not mean a diversity test. We have tests. We have one female candidate among the eight. The bank finds itself in the same situation as many of these multilateral institutions. There is a lack of gender balance, and it's a problem in the multilateral landscape. And it's something particularly when you think about the general background of candidates for these kinds of positions. They often come from finance ministries, and particularly among finance ministries, there's just a woeful lack of female representation.
- [04:02]
A
Okay. That aside, I mean, you said that it was nice to have a list. So that tells us that this is going to be an open election, a good sort of proper, solid election. You confident of that?
- [04:15]
B
Sure. Well, there are different measures for this one. It certainly is a transparent process. The bank has both given us a list of candidates. They've been very clear on the timelines, on the eligibility standards. All of these things that are actually we shouldn't take for granted because we don't see them consistently in all of the bank's peer institutions. It is as a selection process. We shouldn't shy away from the fact that it's a political process. The bank itself is owned by governments and there's campaigning involved here. It really is about getting the votes that are needed to be elected. So in that sense, there is politics going on here. And that's not always. It's not always evident exactly what the dynamics are and what's swaying one country or another.
- [05:08]
A
So can you break down how that voting process actually works and you know, who has the most votes, that kind of thing?
- [05:14]
B
Yeah. So the rules say that the winning candidate will get a double majority of the votes. So what that means specifically is they must obtain a majority of votes among all of the bank shareholders, and then they also have to obtain a majority of votes from the regional shareholders. In that sense, it certainly tips the balance in favor of the region. Not surprisingly, this is a regional institution. So the job of the candidates is to go out and convince shareholders in a way that meets those thresholds. And as. As you may or may not know, shareholding is weighted in this institution. So not every country has the same number of shares. Some countries matter more than others. That's the reality of the governance system.
- [06:05]
A
Depending on their economy size is it.
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B
Roughly speaking, but basically it reflects the shares of the institution that they own. So for example, Nigeria is the largest shareholder in the bank. The United States is the largest non regional shareholder in the bank. So certainly those two countries will matter in this process.
- [06:23]
A
And when we're talking about the size of those shares, what are we talking.
- [06:27]
B
Say for the U.S. in relative terms, I believe the U.S. is about a 6% shareholder total, whereas Nigeria is closer to 10%. It's important to recognize in a broader way this regional, non regional split because it matters a lot, certainly for the selection process. The, the regional countries comprise about 60% of the bank's shareholding and the non regionals then are 40%. So there again by design, this is an institution whose leader will be picked by the region really for all practical purposes.
- [07:05]
A
And how important is the role of the president in the African Development bank and in terms of African development, do you think?
- [07:14]
B
Well, it's hugely important. I mean this is, I would call it a strong presidency model. The African Development bank, like the World bank and the other regionals is shaped by the individuals who hold this job and the other senior management jobs. The shareholders, you know, they play their role but frankly it's more of a veto role. They will say no to certain things. They don't set a positive agenda. That's the job of the president. President. So really this individual matters a lot, both for broad strategy but also day to day management of the institution.
- [07:48]
A
In terms of being seen as a global leader, in terms of issues that are more than whether the bank should engage in a certain project. Is that this role, is that what this person does increasingly? I mean President Kabirruka has done that, doesn't he?
- [08:05]
B
Yes, President Kaburruka has certainly played that role in a way that I think has pulled up the reputation of the institution. It's not something to take for granted. I think that does matter. It depends on the individual a lot. But I would certainly put it high on the list of things that a new president should prioritize going forward is making sure that the bank is viewed as a critical voice on Africa issues, on development issues more generally on the global stage.
- [08:38]
A
And you know, who the president is has a big issue, has a big bearing on how well the bank can perform. President Kabaj helped restore the bank's credibility and its AAA rating.
- [08:51]
B
Yeah, that's right. I think, you know, beginning in that period is when the bank really started to take off and these were gains that Kaburruka really capitalized on and took the institution to a much higher level. And yes, you can measure it. And in strictly financial terms, the loss of the AAA rating and then getting it back in more recent years was certainly a step forward. The vote of confidence from the shareholders that we saw with a major capital increase in 2012. These are things that show an institution that's on the rise and an institution that really, you know, for the next president certainly is not someone who will be able to rest on the laurels of his predecessor. It's, you know, a period of rapid growth, a lot of change in the continent. There's a lot to be done in the president's office.
- [09:50]
A
Let's talk about that predecessor a bit. Donald Kabirruca. How would you say what were the key things of his presidency that mark him out?
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B
It always struck me that he had a clear sense of the bank's role in prioritizing what the bank would do. And here I think he distinguished himself, frankly, among the multilateral development banks. His willingness to say what the bank would not do, and he was clear on this, I think, early on in his presidency, is that the bank would have to focus particularly as a relatively small institution among, you know, comparing it to the footprint of the World Bank. So he really shaped an agenda that had the bank focused in particular on infrastructure and certainly in a way that was reflecting what he was hearing very clearly from the countries of the region in terms of what their demands were when it came to setting a development agenda. So I think he was extremely effective at matching the bank's agenda to the agenda of the country partners and then really acting on that and making sure that that's where the money was going. It wasn't just rhetoric.
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A
And he spoke out as a kind of statesman as well, rather than someone just worried about lending.
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B
That's right. And this is critical. It's a good point. One of the intangibles of these jobs, and it's there or it's not. But as I said, these are political institutions, and that can matter in how they engage in their countries at the client level. To what degree can they influence policy and the politics that come with policy. And I think President Kabiruka has been particularly effective at being viewed as a strong partner to the officials of the region and helping them make difficult decisions, politically difficult decisions that affect development in their countries. That's a very hard thing to do. I would say that the bank as a regional institution has a leg up in that compared to, say, a global Development institution that perhaps is not headquartered in the region, is not led by someone of the region. And I think that's again where the bank and President Kabruka has distinguished itself.
- [12:15]
A
So that's a bit of President Kaborruca's legacy. But what are the issues you think are uppermost for whoever succeeds him?
- [12:24]
B
So, as I said, I think for the next president, it's not a matter of sort of resting on the successes of the institution because frankly, you know, it's a hugely dynamic region. So, you know, the institution, just to keep up with that dynamism, has to adapt just mercilessly and continuously. It's also a region that continues to have major challenges. If you think of, you know, the number of fragile and conflict affected states and the bank's mandate there, this is a hugely challenging agenda. I don't think no one, I don't think any one institution has sort of figured that out yet. There's a lot of work there and it will continue to happen country by country, but it has to be a priority for the next president. The resource wealth of the region, you know, how will the bank engage with these countries? You know, that is an area where it's not necessarily about the bank deploying its own capital, its own resources, but really deploying expertise and working as a partner with countries as they figure out what to do with their resource wealth.
- [13:32]
A
Which is a question that many of them are asking right now.
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B
That's right. And you know, where do they seek out advice and where do they get good advice? And I think the bank needs to be in those conversations.
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A
And there's a large amount of money that could be coming on stream that could make a huge difference to the lives of people in those countries.
- [13:47]
B
That's right. Or, you know, in the alternative, the bad case is that it's a lot of money that is wasted. And then more generally, I think private capital flows in general. So whether it's coming from outside the region or sources within the region, how does the bank become a better partner with private sources of capital, as we say, leveraging that capital for development purposes? This is on the minds of all of these institutions right now. How will they do this going forward? It remains a key question.
- [14:24]
A
Yeah, financing with development is something that we are all thinking about a lot right now as we head towards the Additapapa summit in July. So looking forward to whoever the next president will be. And you've talked about some of the issues and challenges and priorities that you think the next president of the African Development bank should have. How can the US Help that person succeed and help the African Development bank succeed in the years to come?
- [14:51]
B
I think the US Will be most successful with a future president when it recognizes both a leadership role as a non regional member of the bank. It is, after all, the largest shareholder among the non regional members, but also, in a broader sense, a lesser role for a regional institution. Again, this is a institution that is largely governed by its regional shareholders. And I think as long as the U.S. is respectful of that and taking its cues from the regional members themselves and from the new president and looking to be helpful and deploy its considerable resources, whether they're financial or in areas of expertise within our agencies, then I think we act as an effective partner to the institution.
- [15:41]
A
Does that mean the US should not try and call the shots?
- [15:45]
B
I think the US should not try to call the shots. And I think certainly U.S. officials have learned from experience over the years that the US Government isn't in a position to call the shots in this institution. It is a. The US Is a source of considerable influence, but not a dominant one.
- [16:07]
A
So looking forward then, are you hopeful, confident for the future of the African Development bank, given this short list of candidates and therefore for the future African Development?
- [16:19]
B
I am hopeful and I'm reasonably confident. I think President Kaburruka has left the institution in very good standing. You know, I think he certainly has seen it as part of his job to make sure that it doesn't depend on him personally for its success. So it is a financially strong institution. It is an institution with a great deal of expertise residing within it. And I think we have a list of very credible candidates. So I expect that through a very interesting process, a candidate will emerge that will be able to lead the institution very effectively.
- [16:57]
A
Okay, so the election, as we were saying, is in May. Plenty more to talk about about the potential candidates between. Now then, CGD Scott Morris, an expert on multilateral institutions. We thank you very much for your time, Scott.
- [17:09]
B
Thank you.
- [17:10]
A
And we'll be back again with another CGD podcast very soon. Thanks for listening.