Tuesday, 28 July 2020

A much awaited report by an Independent Review Panel has completely exonerated the President of the African Development Bank, Akinwumi Adesina of any ethical wrongdoings.

The Independent Review Panel was set up by the Bureau of Governors of the Bank, following a complaint by the United States, 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.

The distinguished three-member Independent Review Panel include Mary Robinson, who is a former President of the Republic of Ireland, a former United Nations High Commissioner for Human Rights, and the Chairperson of the Elders, a global body of wise persons concerned with the world's wellbeing; the Chief Justice of the Supreme Court of Gambia, Mr. Hassan B. Jallow; and Mr. Leonard F. McCarthy, a former Director of Public Prosecutions, a former Director for the Office of Serious Economic Offences, and a former Head of the Directorate of Special Operations of South Africa. He also served as the Vice President of Integrity for the World Bank for nine years.

In January 2020, sixteen allegations of ethical misconduct were levelled against Adesina by a group of whistleblowers. The allegations which were reviewed by the Bank's Ethics Committee of the Board of Directors in March, 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.

The report of the Independent Review Panel states 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 once again vindicates Adesina and states, "It has considered the President’s submissions on their face and finds them consistent with his innocence and to be persuasive.”

The conclusions of the Independent Review Panel are decisive and now clear the way for Governors of the Bank to re-elect Adesina to a second five-year term as President during annual meetings of the Bank scheduled for August 25-27.

Adesina is a highly decorated and distinguished technocrat and globally-respected development economist. He was awarded the prestigious World Food Prize in 2017 and the Sunhak Peace Prize in 2019 for global leadership in agriculture and for good governance.

Since taking over the reigns of the Bank in 2015, he has introduced several innovative reforms including a High5 development strategy; a restructuring of the bank including setting up offices in several African nations to get closer to its clients; an Africa Investment Forum that has attracted $79 billion 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 $93 billion to $208 billion, in October 2019.

In June and July respectively, global credit ratings agencies Standard and Poors and Fitch Ratings both affirmed the ‘AAA’ rating of the Bank, with stable outlook.

Under Adesina's leadership the African Development Bank launched a $10 billion crisis response facility to boost African nations’ ability to tackle the health and economic effects of COVID-19.

Several Governors of the Bank speaking off the record, say it is now time to put recent events in the past; provide the Bank's President with full support; and bolster the Bank's efforts on Africa's critical development issues.

Published in Bank & Finance

The COVID-19 pandemic has revealed the extent of Africa’s reliance on imports.

As global supply chains and the flows of manufactured goods around the world have been disrupted by lockdown restrictions, African countries have faced the prospect of mass unemployment and curtailed economic growth in a way which more self-reliant developed countries have not, as noted by the African Union in its research paper titled Impact of the Coronavirus on the African Economy.

As leaders globally consider the trade-off of permitting sectors of their economies to operate while still minimising the risk of transmission of the virus, the imperative of long-term, sustainable economic development in Africa through coordinated initiatives has never been clearer. Investment in industrialisation is a key lever to moving the economic growth needle over the long term, as demonstrated by the last few decades of economic growth trends globally.

Those countries that have industrialised and exported manufactured goods have become the most resilient and diversified economies. In the wake of global supply chain disruption, Africa faces a golden opportunity for governments to provide incentives for industrialisation and the development of local value chains. Industrialisation cannot happen in a vacuum: governments need to work hand in hand with development finance partners who can provide the funding that manufacturers and suppliers require to scale up production and manufacture appropriate goods to meet market demands.

Joel Jackson, CEO of Mobius Motors, based in Nairobi, Kenya, says during COVID-19-induced lockdown Mobius has continued to focus on testing and development of a new vehicle model which will be uniquely tailored to the African environment, but once restrictions are lifted and economic activity can resume in full, will scale up production and distribution of its vehicles to the wider African market.

“With a vehicle designed for African operating conditions and sold at an unparalleled price point, Mobius is driving down the cost of vehicle ownership; playing an important role in catalysing economic development in Africa, on two fronts. First, the pandemic and subsequent lockdown have shown how profoundly important mobility is to a fully functioning economy and healthcare system. Second, vulnerabilities of global supply chains to pandemics have highlighted the importance of localisation and self-reliance to build resilience in national and regional manufacturing ecosystems” he says.

Jackson says African economic recovery will require doubling down on industry potential and working with development funders who recognise the benefits of greater self-reliance in Africa’s future growth story.

“This kind of event fundamentally undermines global supply chains and import-dependent markets, making it even more crucial for African countries to build their long-term resilience through a stronger and more localised supplier landscape in the manufacturing sector. Governments need to expand incentives to companies and business models that have the potential for a disproportionate impact on job creation and up-skilling.”

Mobius is currently in discussions with the Kenyan government about incentives for local industrialisation and skills development. “The more we invest in industrialisation, the more we enable a self-fuelling flywheel of economic growth and consumer market development,” Jackson says.

He cites a recent research paper by McKinsey, Reopening and Reimagining Africa: How the COVID-19 crisis can catalyze change, which states that Africa cannot rely on business as usual to come back from the brink. In recovering from the crisis, Africa has the potential to create a reshaped and more resilient manufacturing sector, “provided that governments and businesses tackle long-standing barriers to industrialisation and cooperate to seize new opportunities”.

“We estimate that, for every dollar of manufactured product, Africa imports approximately 40 cents in inputs from outside the continent—higher than most other regions in the world. Over five years, a serious push to reduce reliance on global supply chains could add an initial $10-20 billion to the continent’s manufacturing output if 5 to 10 percent of imported intermediate goods can be produced within the region. In addition to supply-chain resilience, the shift could also benefit exporters in countries experiencing devaluation, if they could capture the upside of increased export attractiveness with less burden of more expensive imported inputs,” the report says.

No African car brand has been able to establish a presence in local markets at scale, and Jackson says a coordinated effort with governments and funders can overcome structural challenges to scale up local production and content. Mobius was founded in 2011 and has focused on manufacturing a multi-use transport platform that can “plug in” a range of different modules to enable a myriad of transport applications – something imported vehicle models are unable to do in meeting African challenges.

“There is a clear and significant gap in the market: durable and affordable vehicles, offering the versatility consumers want. We have donated two of our first-generation Mobius II vehicles to the Kenyan government for the COVID-19 community relief effort, and the advantages of a locally tailored vehicle platform are demonstrable. The next step is to progressively scale our next-generation Mobius 2 vehicle across the continent and drive positive and sustainable socio-economic change,” Jackson says.

Published in Business
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