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US Government Demands Fresh investigation into African Development Bank’s President, Adesina

The United States Treasury Secretary, Stephen Mnuchin has requested an independent investigation into allegations leveled against the President of the African Development Bank (AfDB), Akinwumi Adesina.

Akinwumi Adesina is accused of handing contracts to acquaintances and appointing relatives to powerful positions.

Some staff of the AfDB had accused Adesina of 20 breaches of the bank’s code of conduct, including “unethical conduct, private gain, an impediment to efficiency, preferential treatment, and involvement in political activities”.

On May 5, the ethics committee of the continental bank, headed by Takuji Yano, said in its report that Mr Adesina was not guilty on all counts.

Mr Yano is a Japanese executive director charged with the responsibility of investigating allegations by some concerned employees against the official.

The committee described the allegations that he (Mr Adesina) violated the code of conduct of the institution as “spurious and unfounded”.

Stephen Mnuchin addressed to Niale Kaba, chair of AfDB’s board of governors, rejected the findings by the ethics committee of the bank that “totally exonerated” Adesina and has called for a deeper investigation. The US Treasury owns the largest non-African stake in the bank.

The US has a 6.5 per cent stake in the lender, the largest shareholding after Nigeria as of November 2019, according to the AfDB’s website.

US criticism of the bank’s internal processes follows comments by World Bank President, David Malpass, in February that multilateral lenders including the AfDB tend to provide loans too quickly, and, in the process, add to African nations’ debt problems.

The bank rebutted the statements as “inaccurate and not fact-based”.

The AfDB is Africa’s biggest multilateral lender and has an AAA rating from Fitch Ratings, Moody’s Investors Service and S&P Global Ratings. Its shareholders are Africa’s 54 nations and 27 countries in the Americas, Europe, Middle East and Asia.

U.S Govt and AfDB

The U.S. became a member of the African Development Fund in 1976 and of the African Development Bank in 1983. Also, its bilateral cooperation with the bank has been strengthened through cooperation agreements.

First, in 2008, a Memorandum of Understanding was signed with USAID to launch a five-year partnership in support of African small and medium-sized enterprises by accelerating investment. It also provides co-financing arrangements for a shared contribution of 40% for the Bank, 10% for USAID and 50% for other partnering banks.

Another MoU was concluded in May 2016 with the Millennium Challenge Corporation that provides for sharing information and data particularly in the power sector, with focus on mobilizing private investment.

Read the full text of the letter below

The United States received your letter of May 5, in which you share your view that the board of governors of the African Development Bank should adopt the conclusions of the bank’s ethics committee and declare that the president is “totally exonerated of all the allegations made against him.” Our constituency cannot make such a declaration at this time. We have deep reservations about the integrity of the committee’s process.

Instead, we urge you to initiate an in-depth investigation of the allegations using the services of an independent outside investigator of high professional standing. We emphasize that undertaking an independent evaluation of facts, at any stage, is not at odds with a presumption of innocence.

The allegations set out in the whistleblower complaint submitted on January 19, 2020, raise significant issues that all relevant governing bodies of the bank must handle with the utmost care, using all tools available to them. Had the ethics committee undertaken a proper preliminary examination that was in line with the board of governors resolution B/BG/2008/l 1, standard practices at other international financial institutions, and the bank’s own rules and procedures, it would have reviewed available facts that could be gathered by external counsel and found in internal bank records.

We fear that wholesale dismissal of all allegations without appropriate investigation will tarnish the reputation of this institution as one that does not uphold high standards of ethics and governance. This is a serious risk when we need strong confidence in the AfDB to play an influential role in the current global economic and health crisis, and when many shareholders are seeking legislative support for payments under the recently-concluded general capital increase.

Therefore, the United States cannot support dismissing the allegations at this stage. We believe the board of governors must demonstrate that this institution takes governance, anti-corruption, and transparency seriously. We thus request that you take steps to initiate an impartial, independent investigation into these allegations. Whatever the outcome, the AfDB will emerge stronger for having taken seriously its obligations to uphold good governance.

The United States sincerely wishes the AfDB to remain a high-quality institution with the capability to address the needs of the African continent, particularly at this critical time.

Considering the scope, seriousness and detail of these allegations against the sole candidate for bank leadership over the next five years, we believe that further inquiry is necessary to ensure the AfDB’s president has broad support, confidence, and a clear mandate from shareholders.

Please accept our regards and appreciation for considering our request.

SOURCE: BLOOMBERG

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