The African Development Bank - Between Financial Success and Social Responsibility

In Perspectives Africa 2/2017 the Heinrich Böll Foundation asked civil society activist Aly Sagne to shed light on the track record of the African Development Bank.

Fishing village Bargny, Senegal

In May 2017 the African Development Bank turned 52 years old. Is this a reason to celebrate? 

As a Pan-Africanist the African Development Bank brings up mixed feelings in me: firstly pride and hope, as our bank has reached maturity and is performing well, and then anxiety considering the tremendous challenges with which the bank and continent are faced.

In what respect do you think the bank is performing well? 

First of all, we have to acknowledge that the bank is the first multilateral regional institution dedicated to the financing of development in Africa. Today, it comprises of 80 shareholders, including 54 regional member countries and 26 non-regional member countries and has established itself as one of the leading development finance institution on the continent. The institution has national or liaison offices in 38 African countries, and two regional resource centres in Nairobi and Pretoria. Between 1967 and 2015 4,974 operations worth about USD 135 billion have been approved. The bank is currently credited with a triple A rating by major international rating agencies attesting its financial health.

Its programmatic priorities – namely to power, feed, industrialise, integrate Africa and to improve African people’s quality of life – are in the right place. 

Where do the challenges come in? 

As the former President of the bank, Donald Kaberuka during his farewell speech in Abidjan stated: “It is not money that delivers development but policy does!” And this is where African civil society has sought to come in. After seeking to re-establish relations with the bank from the 1990s onwards, African civil society put a lot of effort into the bank’s public review of its operational and safeguards policies between 2009 and 2013. 

Important outcomes of this process include the disclosure and information access policy through which the bank confirmed its commitment to openness, transparency, accountability and information sharing concerning its operations and the Integrated Safeguards System (ISS) which is a set of social and environmental standards that the bank’s clients must respect during preparation and projects implementation. An Independent Review Mechanism was updated for the second time in 2014 by the bank through a public consultation process, with progress such as the lifting of limitations imposed regarding the handling of requests related to private sector projects.

Although much has been achieved, there is still a long way to go as effective implementation of these policies is often lacking due to bank’s lack of good will. Also, apart from meetings organised by the bank with civil society, we rarely have had high-level interactions. In May 2016 during the banks 51st Annual Meeting held in Lusaka, Zambia, I even had to threaten to block President Adesina’s access to the meeting room of the Civil Society Forum, in order for management to agree to an urgent meeting with me as a member of the Civil Society Coalition on the African Development Bank. We are still far away from a situation based on trust and mutual respect.

The bank’s ten-year strategy for 2013-2022 entitled “At the centre of Africa’s transformation” puts infrastructure development at the heart of the bank’s objectives. In 2015 alone the bank invested 48.6 percent of its operations in infrastructure. Do you agree with this prioritisation? 

Considering that more than 600 million Africans live without access to electricity, water, an adequate sanitation system and the like, the bank’s focus on infrastructure is pertinent. The question however is not the “if” but the “how”. For example, the bank leads on programmes such as the Programme for Infrastructure Development in Africa (PIDA), a vision and strategic framework for the development of regional and continental infrastructure endorsed by African Heads of State in 2012. Unfortunately, there is no specific participation mechanism and taking into account of civil society perspectives in the project selection process. All projects pass through Country Strategy Papers which supposed to be done through a participative process, including consultation with the civil society organisations. In reality, only governments are the ones consulted and the ones who make the final decision. In rare cases, they invite their friendly civil society partner to have a say and that’s that.

Furthermore, civil society remains very critical in particular with regards to the bank’s strategy in the energy sector which plays a central role in the continent’s infrastructure development agenda: its policy on renewable energy is solely limited to the removal of obstacles to financing, rather than considering it as a preferred technological option. Instead, the bank continues to support large-scale hydro-dams and coal fired power stations without due consideration to their local environmental and social impacts.

Can you provide a specific example of this? 

The bank is invested in the Sendou coal-fired power plant in Senegal. The plant is constructed on one of Senegal’s coastal sites most vulnerable to climate change, opposite a fishing port of a community of more than 70,000 people, and compromising the means of subsistence of more than 1000 women who process fish. All of which is at odds with the bank’s own social and environmental policies.

Our organisation, Lumière Synergie pour le Développement (LSD) has sought access to project documents and to contact the implementation team at the bank in Dakar but this has not been easy. After several years of monitoring the Sendou project, we finally lodged a complaint on 9 May 2016 with the bank’s Independent Review Mechanism for non-compliance with its social and environmental policies. The complaint was registered and is being processed. However they are taking their time. We have been waiting almost a year for the eligibility report which is not yet on the table of the bank’s board, irrespective of the impacts currently being experienced by the local population.

What is your vision for the bank? 

The challenges linked to the development of Africa are immense but I think that the African Development Bank is a technical and financial instrument capable of rising to these challenges. From this point of view, the banks so called “High 5” priorities that I referred to earlier epitomise the continent’s development vision. Nevertheless, I would like the bank to support member states in developing pro-poor policies and to invest in projects in favour of the poor and rural areas, especially in the agricultural and infrastructure sectors. The bank should also encourage member states to prioritise projects which focus on the transfer of knowledge and technology. And lastly it should effectively implement its own social and environmental protection policies and encourage member states to apply them instead of favouring national systems which for the most part are obsolete, weak or limited, especially with regard to resettlement caused by large infrastructure projects.

I would like the bank to be a successful African institution not only from a financial but also a social, environmental and transparency point of view, a bank in the service of Africa and accountable to African citizens. In this regard, collaboration with civil society organisations is essential. But the bank must still make more of an effort to create and secure spaces of participation and dialogue between its managers, member states and civil society throughout the continent.

Aly Sagne is the president and founder of Lumière Synergie pour le Développement (LSD), an advocacy organisation based in Senegal. He is also member of the African Civil Society Coalition on the African Development Bank and a member of the steering committee of the Coalition for Human Rights in Development. 

This interview was first published in Perspectives Africa 02/2017