In 2015, when Akinwumi Adesina took office as the president of Africa’s foremost multilateral development bank, the African Development Bank had a capital base of $93 billion. Almost ten years later, with the capital base expanding to $318 billion, Adesina confidently states, “the Bank you see today is different.” A key achievement during his presidency has been the strengthening of the Bank by convincing both regional and international shareholders to increase its capital, ensuring its stability for the future.

However, in a detailed interview conducted during COP29 in Baku, he acknowledges that many tasks remain and numerous challenges must be confronted.

Climate leadership

The climate crisis stands out as one of the most urgent issues, where the Bank has taken a leading role both in Africa and globally.

“For Africa, the climate crisis could pose one of our most significant challenges, leading to annual losses between $7 billion and $15 billion. We predict that this number will rise to about $50 billion each year by 2030.” Under Adesina’s leadership, the Bank has stepped up its efforts to tackle this situation, particularly by increasing financing for climate-centered projects.

“When I became president in 2016,” he explains, “the Bank devoted only 9% of its total lending to climate-related initiatives. Recognizing the need for enhanced climate finance, especially for Africa’s adaptation needs, we escalated this effort. By 2022, 45% of our financing was allocated to climate. Currently, we are at approximately 50-55%, surpassing the previously established 50-50 mark.”

These initiatives have drawn the attention of the United Nations; in 2021, Secretary-General António Guterres commended the Bank for its leadership in climate matters.

“In 2019, the African Development Bank set a benchmark by dedicating half of its climate funding to adaptation initiatives. Some donor countries have followed suit. It is imperative that all do the same,” Guterres declared.

Adesina believes his approach toward climate initiatives reflects his core principle: “When confronted with a problem, I do not simply lament the lack of support; instead, I seek innovative solutions to tackle the issue. That’s precisely what we have done concerning climate change.”

One such creative approach is the Climate Action Window, a funding mechanism aimed at “climate-proofing” smaller nations. Launched with $429 million during the 16th replenishment of the African Development Fund, it has now attracted over $4 billion in subscriptions. This initiative focuses on climate adaptation (75%), mitigation (15%), and technical support, aiming to aid millions by providing climate data to 20 million farmers, restoring a million hectares of degraded land, and enhancing renewable energy access for 12 million people, alongside improved water sanitation for 9.5 million.

Adesina points out that the World Bank’s International Development Agency is considering similar funds; the International Fund for Agricultural Development has already implemented such initiatives. In partnership with the Global Centre on Adaptation, the Bank has also introduced the African Adaptation Acceleration Program, which is the largest climate adaptation initiative in the world, with a budget of $25 billion. This program seeks to boost climate resilience across the continent by investing in crucial sectors such as green hydrogen, green ammonia, and energy efficiency. Additionally, the Bank has launched the Alliance for Green Infrastructure, aiming for $10 billion in funding for sustainable projects. Adesina personally engaged all G7 leaders to rally support for the initiative, culminating in a $175 billion project preparation facility.

Supporting agriculture

The effects of climate change are already impacting agriculture across the continent, with crop yields declining due to changing weather patterns. Adesina asserts that the Bank’s Technologies for African Agricultural Transformation initiative is “the most significant action we have undertaken for global agriculture.” At the beginning of his term, he was resolute about boosting food production. “I declared that we would invest $25 billion in agriculture. I knew that to achieve self-sufficiency and support global food requirements, we needed to more than double African agricultural productivity.”

This initiative arose from that commitment, linking the global research and development network of the Consultative Group on International Agricultural Research with national agricultural systems and the private sector to provide advanced agricultural technologies to farmers across Africa. Over the past four years, the program has positively impacted more than 22 million farmers by delivering climate-resilient solutions, boosting food security, and promoting sustainable practices.

“During the significant drought in East Africa in 2018-19, through TAAT [the Technologies for African Agricultural Transformation program], we provided support with water-efficient maize, reaching 5.8 million households and benefitting 30 million people who were able to avoid the drought,” he shares.

The project has also produced drought-resistant rice, distributed to 3.2 million households in West Africa. These concrete efforts address the ongoing disappointment of unmet climate commitments, particularly the $100 billion annually promised for climate adaptation that wealthier nations have largely failed to deliver.

At this year’s COP29, the previous target was replaced with a more ambitious goal of $300 billion annually by 2035 – can this be achieved? Adesina asserts that while developed nations need to intensify their efforts and fulfill their commitments, Africa cannot afford to wait idly. “We all bear a collective responsibility to tackle climate issues and safeguard our planet. What matters is not the words we use but our actions. Hope is inherently important, but delayed hope leads to suffering.”

Working with the MDBs

Consequently, multilateral development banks (MDBs), including Adesina’s institution, are increasingly providing funding and collaborating. “We are simplifying our processes, ensuring transparency in our reporting, improving communication, and adhering to our responsibilities within the framework of global commitments,” he stresses.

“For instance, the annual $100 billion pledge from developed nations was facilitated by MDBs. Last year, we collectively extended $125 billion, surpassing the promised $100 billion,” he highlights.

According to Adesina, the Bank intends to maintain its contributions. “At COP29, we reaffirmed our commitment to climate finance as an MDB. By 2030, we [as MDBs] aim to support $170 billion annually, with $120 billion earmarked for low-income and middle-income countries. Additionally, we plan to leverage $65 billion for private climate finance and about $45 billion specifically for climate adaptation.”

However, other stakeholders must also play their part for the collective benefit.

“What I am conveying is that the newly established collective quantified goal requires participation from all. It is essential not to forget the principle of collective but differentiated responsibility. Developed nations, which account for the majority of emissions, must meet their obligations. They need to contribute,” Adesina emphasizes.

“Firstly, there is only so much yield you can extract from a squeezed orange. Eventually, you need to find more oranges. While multilateral development banks will do their part, increased capital is critical. There is a requirement for more paid-in capital to take on higher risks for private sector engagement. Moreover, addressing climate challenges cannot rest solely on additional loans—many countries also need grants.”

Additionally, Adesina considers debt a significant challenge, with around 22 countries on the continent facing moderate to high risks of debt distress.

“We need to find a solution for this. This year, debt service repayments are predicted to hit approximately $74 billion, compared to just $17 billion in 2010.”

Furthermore, African nations frequently face what many view as an unjust risk premium on loans, which is why Adesina advocates for establishing an African credit rating agency. This agency would have superior data and insights into the continent, enhancing assessments of countries’ fiscal circumstances.

“Some may think it’s just the African Union creating an agency for itself. In truth, it would be a professionally managed, independent organization providing credible assessments,” he clarifies. “When you visit a doctor and undergo tests, you have the right to seek a second opinion, right? It’s time for that to happen.”

The Bank is also consolidating its investment guarantee tools into a single entity, the Africa Investment Guarantee Agency, further facilitating investment risk mitigation across the continent.

Drawing on Africa’s rights

A promising avenue that Adesina highlights is the reallocation of the International Monetary Fund (IMF) Special Drawing Rights (SDRs), auxiliary foreign exchange reserve assets created by the Fund, which he believes could be a “magic bullet to tackle global financing challenges.” SDRs were issued during the 2008 financial crisis and following the Covid-19 pandemic, with Africa receiving $33 billion, or 4.5% of the total global allocation of $650 billion.

Adesina shares the belief that unused resources from the Fund should be directed to needy countries, taking this as a personal mission. “I have always believed that SDRs could be optimized because, in a world with diminishing concessional financing, leverage is essential. We need to achieve leverage at minimal or no cost to taxpayers.”

To maximize their impact, the Bank has developed a framework that permits SDRs to be redirected to multilateral development banks, complementing existing IMF mechanisms like the Poverty Reduction and Growth Trust and the Resilience and Sustainability Trust.

“The beauty of this arrangement is its potential for four-fold leveraging; however, since it is hybrid capital, combined with the co-financing from our triple-A rated financial institution, the actual leverage could reach up to eight times.”

The framework designed by the Bank also ensures that SDRs maintain their status as reserve assets and includes provisions for retrieving funds should beneficiaries face liquidity issues. Adesina states that these solutions have garnered both staff and board approvals. “We are enthusiastically pursuing this and I’m genuinely pleased… we must remain adaptable with instruments and use them to maximize global benefits,” he emphasizes.

Optimist-in-chief fears insecurity

Adesina, who considers himself Africa’s “optimist in chief,” asserts that the Bank will continue to advocate for the continent’s interests.

“I have high hopes for Africa, as I am confident in the continent’s capabilities, potential, and the crucial need for Africa to assert its identity on the global stage and unlock its vast resources. The aim is to keep moving forward and delivering more,” he asserts. However, he also acknowledges his concerns regarding peace and security threats. Recent years have seen rising instability across the continent, marked by devastating conflicts in Ethiopia and Sudan, alongside coups and unrest in the Sahel.

Many of these underlying political tensions stem from the lack of jobs and opportunities for Africa’s growing youth population. While directing resources to address some immediate consequences and causes, the Bank is also seeking long-term and sustainable solutions to youth unemployment.

“We cannot have 477 million young people aged 15 to 35 without providing them with financial support. That’s why we are launching what we call Youth Entrepreneurship Investment Banks.”

These banks will provide financial backing, technical assistance, and incubation services for youth-led enterprises, offering equity, debt, and other financial instruments while supporting them throughout their business development journeys. The Bank’s board of directors has approved initial funding of $16 million for Liberia and $100 million for Nigeria, with plans to expand to Côte d’Ivoire, Togo, Kenya, and Tunisia. Six decades after its inception, the Bank continues to explore new and innovative pathways to achieve its core mission, all while navigating the ever-changing global and local economic landscape. Adesina remains optimistic that the Bank will continue to play a vital role in Africa’s resurgence.

“I would assert that the African Development Bank must continue to enhance its capacity in all these areas. We have achieved success thus far, but I believe we need to accomplish even more as we advance,” he pledges.