Africa’s biggest multilateral lender is facing a major distraction just when the continent needs it most.
U.S. Treasury Secretary Steven Mnuchin is demanding that the board of the African Development Bank, which was established in 1963 in the Sudanese capital of Khartoum, organize an independent probe into allegations that President Akinwumi Adesina gave contracts and jobs to friends and relatives. Mnuchin has support from Nordic countries, which like the U.S. hold stakes in the lender.
The Treasury Secretary says he doubts the integrity of a committee that had previously cleared Adesina, Nigeria’s former minister of agriculture and rural development. The AfDB president is running unopposed for re-election at an annual meeting in August. He has repeatedly denied the claims and described them as an attempt to discredit his bid for a second five-year term.
Photographer: Kevin Dietsch/UPI
The dispute could not have come at a worse time. Africa may require at least $100 billion to stabilize countries reeling from the coronavirus outbreak and associated lockdowns, which are pushing economies into recession and heightening the risk of defaults.
The AfDB is expected to play a major role, and the spat could jeopardize a pledge by the lender’s 80 shareholders to more than double its capital base to $208 billion. The Abidjan-based bank’s debt is rated triple A, a status that may also be at stake.
While the International Monetary Fund and a group of the world’s largest economies have agreed to suspend debt-servicing payments for many African nations, the Abidjan-based AfDB has yet to say what it will do to help with debt relief.
The AfDB says there is no ongoing governance or constituional crisis. But with the fate of Africa’s most vulnerable economies in the balance, a swift resolution will need to be found.
Source: Bloomberg
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