Yes, Africa has cause to be very alert about imperialism. But that is not the issue at the AfDB.

Unless you have checked out of social media or messaging platforms like WhatsApp (which would make you a rare being in these COVID times), or you have zero connection to Africa, your timeline, like mine, must be sinking under the weight of theories ascribing geopolitical reasons to the current imbroglio surrounding the renewal of the term of African Development Bank (AfDB) President, Adesina Akinwumi.

The theories range from his purported pro-China stance having angered the “Americans” to his promotion of agricultural domestication in Nigeria rubbing off badly on American agribusiness interests.

Others have hinted at dark and sinister plotting to derail Africa’s financial progress and impose Western imperialism through the back door of hostage finance.

Adesina is charismatic and has many supporters, especially among Nigerian professionals.

A respected Nigerian entrepreneur who worked closely with him during his first election bid spoke passionately in a WhatsApp group about how inspired she had been by Adesina’s dogged determination to overturn an unspoken rule that Nigeria being the lead shareholder should be restrained in backing its nationals for the top post at the Bank.

She hints at the belief that this decision by the Okonjo-Iweala led lobbying team to go full-frontal in support of Adesina against candidates preferred by some Western powers must have ruffled feathers and spawned permanent enmity.

As further evidence of this “geopolitical scheme” to damage Adesina’s standing, supporters point to recent comments by David Malpass, President of the World Bank, criticising the AfDB for lax credit standards purportedly driving profligate African lenders towards debt distress.

By framing the current upheaval at the AfDB as one of imperialistic interference, neocolonialism, and Western plotting against African self-sufficiency, commentators have broadened the scope of analysis well beyond the initial focus on boardroom intrigues surrounding the departure of senior executives of the Bank as Adesina stamped his authority on the institution and positioned himself for a seamless renewal of his term.

Unsurprisingly, many Africans with a limited exposure to the world of multilateral development finance have homed in on the issue of non-African countries owning shares and having voting rights at the AfDB.

One enraged observer on Twitter reminded his followers about the prophecies of Nigeria’s oil boom President, Shehu Shagari, who doggedly fought against the opening up of the AfDB to foreign equity participation. Shagari, in this interpretation of history, had uncanny foresight and could see what his colleagues failed then to see: allowing foreigners a stake in African affairs never ends well.

A more simple explanation?

All this theorising and narrative building have been fascinating, but this situation is definitely one of those where the two simplifying constructs of Hanlon’s razor and Occam’s razor most conclusively apply.

There are simpler explanations of what is going on.

Rather than geopolitical skulduggery, what is going on here can more efficiently be explained, first, by the standard organisational-level power plays wherein every actor calls upon larger forces to push their narrow interests; and, second, Sub-Saharan Africa’s poor sovereign investment strategy and technique.

Let’s take the Malpass criticism, which has been widely used as a prop in the drama of American conspiracy, for instance.

It is true that there is no love lost between Steven Dowd, the US representative on the AfDB board of executive directors and Adesina, and also that the Florida agribusiness and logistics executive has some influence on David Malpass.

Malpass in turn has a solid connection to Steven Mnuchin, the US Treasury Secretary and representative on the AfDB board of governors. But the suggestion that Malpass’ criticism of the AfDB in recent times was a calculated hitjob to pave the way for some diabolical acts is overwrought.

In that speech, Malpass went after multiple regional development banks for what he claims are loose lending standards.

He did not attack the AfDB alone.

More importantly, this is a longstanding pet peeve of his that is reflected in his 1989 testimony to the United States Senate’s Appropriations Committee’s sub-Committee on Foreign Operations, during which he criticised most multilateral development banks as having porous credit standards.

Indeed, as part of a 1982 review of multilateral development banks (MDBs) funding operations, the US, acting on these age-old sentiments, blocked the World Bank from participating in oil and gas investments, insisting that alternative sources of finance exist in the commercial markets.

Whatever the merits of the perennial US policy stance on MDBs needing more stringent credit assessment criteria, it is not some overnight posture triggered by some geopolitical conspiracy against the AfDB President.

Malpass may well have been sincere, even if we want to insist that he is also misguided.

The facts do show that undisbursed loans have more than doubled in value since 2014 whilst the loan book has only grown by about 50%. This is not emphatic evidence of a deterioration of credit standards over the years, but it does show that approvals are becoming somewhat more liberal than borrower capacity would suggest. Reasonable people can disagree about the facts.

What is without doubt is the reality of the inter-personal discord among some key actors in the AfDB’s halls of power. The departures of senior executives early in his term did not occur without rancour. Everyone knew about the grudges, the whispering campaigns, and the off-the-record press briefings.

The simple truth of course is that Africa’s multilateral banks have always been full of intrigue. Occasionally the machinations and scheming spill into opening, as power brokers hang out dirty laundry to dry.

Intriguing developments

In 2013, Laurence do Rego, then the lead risk and finance executive at Ecobank Transnational (Ecobank), a treaty bank originally co-founded and largely seeded by the Economic Community of West African States (ECOWAS), publicly charged the Board of the regional lender as “not operating in the interests of shareholders.”

The scandal that erupted swallowed many executives, including, eventually, the CEO Thierry Tanoh and Chairman Kolapo Lawson.

Do Rego accused the Bank Chair of self-dealing scams and accounting fraud done with the complicity of the CEO. In that controversy, it was the Nigerian government that wanted to clean out the bank and kick out the Chairman, even as the Board remained resolute behind the Chairman.

We also have for reference the long-running saga of Martin Ogang, the Ugandan Chief Executive of the then Eastern and Southern Trade and Development Bank (PTA), now TDB, whose dismissal was loudly canvassed by Zimbabwe.

Zimbabwe’s decision to pull out of the PTA was merely one step on a long and acrimonious road of international machinations and litigation around the Ogang affair. By the time Ogang was finally dismissed, a nice little body of jurisprudence on the immunities and privileges of regional multilateral bodies and their officers had been formed.

Development Finance Institutions (DFIs) are the way they are because that is exactly what you get when politics mix with money.

Which is why it is surprising that people have had to reach so far out in search of complex geopolitical theories to construct an American conspiracy in which the world’s remaining superpower has tied its domination objectives to the removal of Adesina.

It is true that the letter by/from Mnuchin had a touch of arrogance about it.

His complete dismissal of the internal governance processes that had been activated to date in the AfDB to address the concerns of the whistleblowers, and the demand that an “independent outside investigator of high professional standing” be brought in to redo the inquiry all over again represents a wholesale denunciation of the quality of the very diverse board of Governors (composed of all finance ministers of all 80-odd member countries) and the 20-odd Executive Directors, some of international calibre.

But the Board, perhaps misjudging the degree of public interest, ought to have known that in a high-profile investigation of a senior management member confronted with such a wide-ranging array of accusations of wrongdoing, however thinly supported, the conventional practice worldwide has been for the Board to retain outside counsel of impeccable credentials.

Note the difference between bringing in an independent investigator and obtaining proper advice from an ethics specialist and adviser with no prior dealings with the “accused” senior executive. Particularly so, when everyone knows that this is a Board divided on the matter.

The delicate mechanisms of investigating a situation such as this one, where the accusers are taking full advantage of the organisation’s own whistleblower protections, and where allegations abound that some Executive Directors are directly involved, cannot be routinised by trying to resort to “business as usual” procedures.

Specialist skills and an unimpeachable sense, not just of impartiality, but also aloofness, is required. Which is precisely the advantages that outside counsel typically have in navigating the tensions in the organisation and in the Board during such crises.

I have, thus, become unconvinced that the current developments at the AfDB are the best prompt for the kind of geopolitical soul-searching going on in Africa right now.

The geopolitical angst directed at the very fact of there being non-African shareholders in the AfDB and calls for African self-sufficiency in running and fully owning its own development bank is particularly tenuous.

The AfDB as a fully-fledged regional development bank has steadily internationalised in line with the predominant fashion.

The 26 non-African shareholders (ranging from Turkey to Luxembourg) that hold 40% of the equity are largely in it for the returns. A perfectly commonplace basis for governments outside a region to develop an interest in a regional development bank.

The non-Asian shareholding in the Asian Development Bank, for instance, is 36.6%, very close to the situation at the AfDB. The nearly 50% non-Latin American owned capital stock in the Inter-American Development Bank reinforces the view that this is typical.

Nor is this format a phenomenon of the Global South.

Shareholders of the European Bank for Reconstruction & Development (EBRD) include Armenia, Belarus, India, Israel, Mexico, Mongolia, Ukraine, Uzbekistan, Turkmenistan, and of course the US, the largest shareholder. Japan has as many shares as the largest European powers, Germany, France, the UK and Italy. Russia has more shares than Spain, the Netherlands or Switzerland.

Three African countries – Morocco, Egypt, and Tunisia – are shareholders of the EBRD. If Sub-Saharan African governments haven’t seen fit to invest in it, the only reason is the lack of conscious focus on sovereign funds management strategy, a subject to which I shall return.

The AfDB is the only major regional development bank of which the US was not a founding member.

In fact, unlike the AfDB, which resisted non-regional equity participation for so long, mostly due to the influence of its dominant founding member, Nigeria, the Asian Development Bank (ADB) set out from the very beginning to be attractive to international sovereign investors, especially the US.

Despite this openness, the ADB’s regional hegemon, Japan, has continued to exercise outsized influence.

Every single one of the bank’s presidents since inception has been Japanese. This is despite the fact that Japanese shareholding in the ADB is at par with that of the United States (compared to the situation in the AfDB where Nigeria has nearly 50% more in shareholding than the US). Further evidence, quite clearly, that shareholding does not always map linearly to control.

The globalisation of “sovereign finance”, rather than some sinister imperialistic dynamic, appears to be at play here. At any rate, it is this same fact of globalisation that has led to the capital base of the AfDB expanding by more than 11 times in the twenty years since 2000.

It is worth also mentioning that non-regional members are often coveted because they are non-borrowing.

In a crude sense, one can say that the regional members merely circulate the money they contribute among themselves whereas the “foreigners” inject “real” money.

Nigeria may be the biggest shareholder, but it borrows at roughly the same proportion that it chips in. The largest proportion of the AfDB’s non-sovereign lending, more than 18%, goes to Nigeria. Then there is the North African countries, who account for nearly 45% of outstanding loans.

The capital structure of the AfDB, with over 90% of the subscribed capital being “callable” (in crude terms, “pledged”) rather than paid-in (similar to other MDBs in that regard), imposes a uniform burden on all its members, including the non-borrowing “foreigners”, to backstop the large amounts of money the AfDB borrows to lend out to the “home” countries, some of who cannot obtain debt from even concessional lenders like the World Bank.

Virtually the entire foundation of the AfDB’s triple A rating rests on the massive callable capital (nearly $27 billion before the further increases anticipated in the ongoing capital raise) pledged by the rich, non-borrowing, countries. In short, the AfDB desperately needs the non-African members to maintain its vibrancy, or even viability.

The more interesting question is why African governments tend not to increase their subscriptions to this investment grade asset backed by the credit of some of the most powerful countries in the world if Africans deem this ownership to be so precious.

We can only attribute the harm, if any, of this omission or neglect to a poor sense of financial strategy rather than some imperial machinations.

This, it seems to me, is the proper framing of Africa’s geopolitical plight: weak or non-existent strategy.

Ghana, for instance, has had funds locked up in negative real interest bearing assets in New York for a while now because the country’s elite appear incapable of building the necessary political consensus to get creative about restructuring the investment mandates of its sovereign surplus petroleum funds (a parliamentary supermajority is required to make critical headway).

It goes without saying that no imperialists are behind the scenes pulling the strings in this clear domestic matter.

The generally lacklustre performance of African Sovereign Wealth Funds has almost always been attributed to lack of clear strategy and hazy mandates.

Because these are the local entities best placed to support institutions like the AfDB with the financial muscle to grow its capital base, should there be any merit in the view that foreign subscription to AfDB’s capital stock must be discouraged in favour of regional ownership, the blame for the tardiness in achieving such a goal would have to be directed inwards not outwards.

I do not deny the existence of a more sophisticated alternative argument about how development finance institutions end up becoming “captured by imperialism”, often through delegation of scrutiny to the Bretton Woods financial system due to the perceived technical rigour of these Global North dominated entities. But that is not the argument we have heard being canvassed in the ongoing AfDB affair.

Yes, Africa has cause to be very alert about imperialism, and general concerns about the strictures of the neoliberal world order are often legitimate, but it serves little purpose to blow up every boardroom fracas into a geopolitical spectacle.

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The author is a Ghanaian social innovator, entrepreneur, writer and vice-president at IMANI. He is also the founder and president of mPedigree.