In the normal run of things, the election of the President of the African Development Bank would be a non-event. Nothing particularly newsworthy to the world at large, especially coming from what the President of the United States, Donald Trump, has disparagingly described as “shithole countries”. The re-election of the Nigerian, Dr. Akinwunmi Adesina, for a second term of five years as President of the bank last Thursday, August 27, 2020, caused ripples around the world of finance and politics in Washington, Africa, and beyond. Why, you might ask? Because the US fought tooth and nail to prevent Adesina from being re-elected. The Trump administration deployed all the diplomatic and financial muscles at its disposal, to block his unopposed nomination by the bank’s Board of Directors. By making it such a critical issue of principle, the administration placed the weight and prestige of its diplomatic leverage on the line, and came up short. The question is why the US spent so much political capital on an apparently minor office in a far-away land? And, given that Adesina received the unanimous (100%) backing of all regional (54) and non-regional (26) members of the board for a second term, what did they see in the candidate that America did not? Why was there so much American angst over an otherwise innocuous process, and how did they misjudge the mood of the stakeholders, and got the outcome so spectacularly wrong?
We cannot understand America’s keen interest in the Presidency of the bank in a “shithole country” without a broad understanding of international capitalism that informs it. Since the end of World War II, in 1945, the centre of gravity for international finance shifted onto the US from Europe and from the UK in particular. America was called upon to help rebuild Europe from the ruins of the war, which it did with aplomb, but at a price. Control of international finance was to be led henceforth, by the US, through the “Bretton Woods” institutions in Washington: the World Bank, IMF, and the World Trade. The World Bank was to be (permanently) run by an American, and the IMF run in the same breath by Western Europe with the US approval. World trade was to be organised around “American values” of cut-throat competition and “free trade” in which it had become dominant. Thus, America became leader of the “free world”, which needed to be protected, where necessary, by gunboat diplomacy and blood. Unfortunately for the US, but fortunately for the rest of the world, that consensus has been shattered by the expansion of international commerce beyond borders. China’s rise to the summit of international trade has been accompanied by the US decline in economic and political influence. This is one of the consequences of the Trump administration’s penchant for upending international norms in the area of collective defence and economic cooperation, which is winning applause at home, but gradually eroding America’s grip on global capitalism. It is this realisation that is making American officials jittery. It is what has made an otherwise inconsequential bank in an economic backwater of Ivory Coast, suddenly become so consequential.
The supreme irony of this, is that Adesina is an apogee of Donald Trump; a disrupter par excellence, whom the Trump administration should readily be carrying shoulder high. He is a colourful, gregarious, larger-than-life character, who has no time for conventions and customs. He has proved that in his previous careers, and in particular as Minister of Agriculture in Nigeria prior to his appointment as President of the bank in 2015. As an illustration, for almost 50 years, Nigeria’s staple diet, rice, was comfortably supplied by other countries in Asia and beyond. Adesina came in and famously proclaimed: “Nigeria has no business importing rice”. The effect of that is now seen in the closing down of major rice factories in Asia, and a corresponding boom in its production in Nigeria. It has also led to the temporary closure of Nigerian land borders to prevent the hitherto lucrative rice smuggling into the country. It came as no surprise, therefore, that Adesina’s first major move at the African Development Bank was to embolden and empower the bank by ‘recapitalising’ it. It used to be worth a paltry $93bn, it is now worth $208bn. And, rather than sheepishly following Washington’s economic precepts, it is now aggressively living up to its founding mission: development, especially in the fields of education, energy, agriculture and infrastructure. The financial ratings agency, S&P, gave the bank its ‘triple A’ for an outstanding performance in 2019. But, that notwithstanding, America no longer considers it a ‘reliable’ partner. Consequently, Adesina had to go in order to align the bank with the Trump administration’s economic world view more pointedly. How ironic is that?
Americans used to have the smartest tactics for removing an unwanted head of any global institution; tar the person with a brush of “scandal” or “corruption” and rely on Western allies to fall in line. It is the manifestation of the US “soft power” which has been eroded in recent times, not least by the Trump administration itself. Thus, in his bid for a second term, Adesina was suddenly ambushed by a litany of allegations of “corruption” and “nepotism” by an anonymous employee of the bank; a whistleblower. The bank’s internal Ethics Committee immediately smelt a rat. It investigated the complaints and promptly cleared Adesina of any wrongdoing. America, the second largest shareholder of the bank after Nigeria, kicked against the committee’s conclusions and insisted on an “independent” investigation of the allegations. The board of the bank felt slighted by this demand, but gave in, and mandated a “High-Level Panel of Independent Experts” to carry out a review of its Ethics Committee’s clearance of Adesina. It was headed by Professor Mary Robinson, former President of the Republic of Ireland. Its verdict was as compelling as it comes: “It has considered the President’s submissions on their face and find them consistent with his innocence and to be persuasive. Complaints were correctly dismissed at the stage of preliminary examination”. Most damning of all, it concluded that the “complaints did not satisfy the threshold of credibility and substantiation”.
With that clean bill of health, Adesina was confirmed for a second term. The US Treasury Secretary, Steve Mnuchin, who had spearheaded the fierce opposition to Adesina’s re-election, went back home with his tale between his legs. China, the main beneficiary of any US humiliation on that front, has remained tight-lipped and in the shadows all along. Chinese officials must be wringing their hands with glee at the comeuppance for America. The bank’s new capitalisation, $208bn, though substantial, is only equal to the level of China’s sprawling investment on the continent. The looser America’s economic grip becomes, the better for China’s influence. It is probably an inevitable consequence of America’s persistent attempt to have its cake and eat it too on the global stage. This is where “America first” doctrine comes face to face (and indeed) collides with reality. Necessity for multilateralism and respect for traditional allies (anathema in Donald Trump’s worldview), are, nevertheless, paramount for success. It is not too late for America though. It can, and will bounce back from its go-it-alone, debilitating, attitude only if it stops banging on how much the rest of the world owes ‘us’, and realises how it needs the rest of the world to help salvage something from its rapidly dwindling global economic dominance.