U.S., Nigeria Square Up for Tussle Over African Bank Chief

(Bloomberg) -- The U.S. and Nigeria are facing off in a dispute over whether allegations against the head of the African Development Bank should be investigated a second time, exposing a fault-line between the West and the continent over the issue.

The spat between the world's biggest economy and Africa's largest oil producer comes at a time when the lender is helping source $100 billion the continent needs to stabilize economies hobbled by the coronavirus pandemic. For AfDB President Akinwumi Adesina, it threatens an unopposed bid for a second term as head of the bank later this year.

Nigeria opposes calls by the U.S. Treasury for an independent probe into whistleblower allegations that Adesina awarded contracts to friends and relatives, after an earlier internal investigation cleared him.

Former Nigerian President Olusegun Obasanjo called for several African ex-presidents to reject the U.S. request on the basis that it “ridicules” the bank. Bowing to U.S. pressure might “mean the end of the African Development Bank, as its governance will be hijacked away from Africa,” he wrote in a May 26 letter verified by his spokesman.

The dispute has drawn in other AfDB members, with the U.K., the Netherlands, Switzerland, Belgium and Austria among those who've joined Denmark, Finland, Norway, Sweden and the U.S.'s call for an external investigation, according to country representatives.

Pan-African Response

In Africa, Equatorial Guinea and Sierra Leone are backing Adesina, who's also won praise from the African Union, South African President Cyril Ramaphosa and gathered support on social media via #IStandWithAdesina. Harold Doley, the U.S.'s first representative to the AfDB in 1983, asked his country to “walk in lockstep with (its) fellow African governors” by supporting Adesina, in a letter addressed to the Treasury.

“The bank as an institution concerns not only Nigeria but the whole of Africa,” said Grieve Chelwa, who teaches economics at the University of Cape Town's Graduate School of Business. “The bank is one of the most important institutions Africa has. In the coming days, we will see some sort of pan-African response with more countries joining in.”

The U.S. has a 6.5% stake in the AfDB, the largest shareholding after Nigeria, which held 9.1% as of November. The 56-year-old institution allowed non-regional countries to join in 1982, and now has 54 shareholders from Africa and 27 from the Americas, Europe, the Middle East and Asia. Members in October pledged to provide funding that will more than double the AfDB's capital base to $208 billion.

Collections on commitments and payments for the bank's largest-ever general capital increase are going according to plan, AfDB Treasurer Hassatou N'Sele said in an interview Friday.

“We have a very strong financial profile and ample liquidity, allowing us to meet our commitments and support our mandate for the African continent,” N'Sele said. “Our lending activities are of course aligned with our financial capacity.”

Presumed Innocent

Obasanjo's missive followed a May 22 letter to the AfDB's board by U.S. Treasury Secretary Steven Mnuchin calling for the independent probe. Mnuchin also criticized the bank's internal ethics committee, which two weeks earlier said it found no evidence to support the allegations against Adesina.

The U.S. request is “outside of the laid-down rules, procedures and governing system of the bank,” Nigerian Finance Minister Zainab Ahmed said in a May 28 letter to the bank's governing body. “If there are any governance issues that need improvement, these can be considered and amendments proposed.”

“Undertaking an independent evaluation of facts is not at odds with a presumption of innocence, and by promoting transparency and good governance, can only strengthen the AfDB's capacity to deliver results to people across Africa,” a U.S. Treasury spokesperson said in an emailed response. A spokesman for the Nigerian presidency said the finance minister had spoken for the government.

A group of AfDB governors agreed on May 26 on an independent probe of the lender's president. The top governing body on Thursday said Adesina hasn't been asked to stand down while it continues to review the fallout from the allegations.

‘Literal Slap'

Adesina, 60, a former Nigerian agricultural minister, has repeatedly denied any wrongdoing and said Wednesday that “fair, transparent and just processes” would vindicate him. “I express my gratitude to all the shareholders of the bank for your support, and continued support, today and for the future. Thank you all,” he said on Twitter on Thursday.

Officials representing the U.K., the Netherlands, Switzerland, Belgium and Austria confirmed they support an external investigation, while Nordic countries declined to comment.

“We expect all our funding partners -- including the African Development Bank -- to maintain high standards of integrity and transparency,” a spokesperson for the U.K. Department for International Development said by email.

The dispute makes “it very evident that what we think of as an African bank, is in fact an outfit where the U.S. can dismiss a conclusion reached by the bank's ethics committee,” said Chelwa of the University of Cape Town. “This has upset Africans who were under the impression that they run things to realize this isn't necessarily the case. It's a literal slap in their face.”