
When Akinwumi Adesina took on the role of president at Africa’s prominent multilateral development bank in 2015, the African Development Bank had a capital base of $93 billion. Almost ten years later, with the capital base now at $318 billion, Adesina confidently states, “the Bank you see today is different.” A key achievement during his presidency has been strengthening the Bank by convincing both regional and non-regional shareholders to increase its capital base, thereby ensuring its stability for the future.
Nevertheless, in an exclusive and lengthy interview conducted during COP29 in Baku, he acknowledges that significant work remains to be done, along with many challenges that need addressing.
Climate leadership
Among the most urgent challenges is the climate crisis, where the Bank has positioned itself as a leader both within Africa and globally.
“For Africa, the climate crisis poses one of our greatest threats, leading to estimated losses between $7 billion and $15 billion annually. We predict this figure will rise to about $50 billion per year by 2030.” Under Adesina’s guidance, the Bank has heightened its response to this crisis by increasing its lending towards climate-centric projects.
“Upon taking office in 2016,” he explains, “the Bank allocated a mere 9% of its total lending to climate initiatives. Understanding the urgent need for increased climate finance, especially for Africa’s adaptation efforts, we amplified this. By 2022, 45% of our financing was directed to climate-related projects, and we now stand at approximately 50-55%, surpassing the 50-50 benchmark.”
These efforts have attracted the attention of the United Nations; in 2021, Secretary-General António Guterres commended the Bank for its outstanding climate actions.
“The African Development Bank set a noteworthy precedent in 2019 by allocating half of its climate finance to adaptation initiatives. Several donor countries have followed suit. All should take similar action,” Guterres stated.
Adesina attributes his approach to climate initiatives to his core philosophy: “When I encounter a challenge, I focus not on lamenting a lack of support but on finding innovative solutions to address it. That is exactly what we have accomplished concerning climate change.”
One such innovation is the Climate Action Window, a funding mechanism designed to “climate-proof” smaller nations. Launched as part of the African Development Fund’s 16th replenishment with an initial funding of $429 million, it has since attracted over $4 billion in commitments. This initiative, which prioritizes climate adaptation (75%), mitigation (15%), and technical assistance, aims to assist millions by delivering climate data to 20 million farmers, restoring one million hectares of degraded land, and improving renewable energy access for 12 million people while enhancing water sanitation for 9.5 million.
Currently, the World Bank’s International Development Agency is considering the establishment of similar funds, and the International Fund for Agricultural Development has already put such measures into action. In collaboration with the Global Centre on Adaptation, the Bank has also launched the African Adaptation Acceleration Program, the world’s largest climate adaptation initiative, with a budget of $25 billion. This program aims to bolster climate resilience across the continent through investments in critical areas like green hydrogen, green ammonia, and energy efficiency. Additionally, the Bank has initiated the Alliance for Green Infrastructure, targeting $10 billion for sustainable project financing. Adesina actively engaged all G7 leaders to rally support for this initiative, culminating in a project preparation facility amounting to $175 billion.
Supporting agriculture
Agriculture across the continent is already feeling the effects of climate change, with crop yields decreasing due to changing weather patterns. Adesina asserts that the Bank’s Technologies for African Agricultural Transformation initiative is “the most significant action we have taken for global agriculture.” At the start of his tenure, he was resolute about increasing food production. “I declared that we would invest $25 billion in agriculture. I recognized that to achieve self-sufficiency and support global food demands, we must more than double Africa’s agricultural productivity.”
This initiative stemmed from that commitment, integrating the global research and development framework 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 had a positive impact on more than 22 million farmers by delivering climate-resilient solutions, enhancing food security, and promoting sustainable practices.
“During the 2018-19 drought in East Africa, our assistance through TAAT [the Technologies for African Agricultural Transformation program] helped deliver water-efficient maize to 5.8 million households, benefiting 30 million individuals who avoided drought consequences,” he recalls.
The project has also developed drought-resistant rice, reaching 3.2 million households in West Africa. These actions are tangible responses to the ongoing frustration of unmet climate commitments, especially the annual $100 billion pledged for climate adaptation, which has largely fallen short from wealthier nations.
At this year’s COP29, this previous target has been upped to an ambitious goal of $300 billion annually by 2035 – is this feasible? Adesina believes that while developed countries need to ramp up their efforts and meet their obligations, Africa also cannot simply wait. “We all carry a shared responsibility to confront climate issues and protect our planet. It’s not just our words that matter but our actions. While hope is essential, postponed hope leads to suffering.”
Working with the MDBs
In response, multilateral development banks (MDBs), including Adesina’s institution, are prioritizing funding availability and collaboration more than ever before. “We are streamlining our processes, ensuring our reporting is accountable, enhancing communication, and fulfilling our commitments within the context of global obligations,” he emphasizes.
“For example, MDBs facilitated the annual $100 billion commitment from developed nations. Last year, we collectively lent $125 billion, surpassing the pledged $100 billion,” he highlights.
According to Adesina, the Bank plans to continue fulfilling its role. “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 aim to leverage $65 billion for private climate financing and about $45 billion specifically for climate adaptation.”
However, it’s essential that other stakeholders also step up for the collective good.
“My message is that the newly established collective quantified goal requires participation from all. It is vital not to overlook the principle of collective but differentiated responsibility. Developed countries, which are responsible for the vast majority of emissions, must meet their obligations. They should contribute,” Adesina stresses.
“Firstly, there’s only so much yield you can extract from an excessively squeezed orange. Eventually, you need to seek out more oranges to draw from. Although multilateral development banks will play their part, there is a pressing need for increased capital. More paid-in capital is necessary to take on greater risks for private sector engagement. Moreover, addressing climate challenges cannot solely hinge on additional loans—many countries need grants as well.”
Adesina also identifies debt as a significant challenge, with roughly 22 countries on the continent facing moderate to high risks of debt distress.
“We need to find a solution to this. This year, debt service repayments are projected to hit approximately $74 billion, up from just $17 billion in 2010.”
Furthermore, African nations often face what many consider an unjust risk premium on loans. This fuels Adesina’s advocacy for establishing an African credit rating agency, one that would possess enhanced data and insights into the continent to improve evaluations of countries’ fiscal conditions.
“Some might see this as merely the African Union creating an agency for itself. In truth, it would be an independently managed, professional entity providing reliable evaluations,” he clarifies. “When you visit a doctor and undergo tests, you have the right to seek a second opinion, don’t you? It’s time for that to happen.”
The Bank is also consolidating its investment guarantee tools into one organization, the Africa Investment Guarantee Agency, aimed at further enabling investment de-risking across the continent.
Drawing on Africa’s rights
Adesina views the reallocation of the International Monetary Fund (IMF) Special Drawing Rights (SDRs) as a promising opportunity—a foreign exchange reserve asset created by the Fund, which he sees as a potential “magic bullet” for addressing global financing challenges. SDRs were issued during the financial crisis in 2008 and again following the Covid-19 pandemic, with Africa receiving $33 billion, representing 4.5% of the total global allocation of $650 billion.
Adesina is not alone in advocating that unutilized resources from the Fund should be redirected to countries in need; he is passionately pursuing this goal. “I have always believed that SDRs could be optimized because, in a world with declining concessional financing, leveraging is critical. We need to achieve leveraging at minimal or no cost to taxpayers.”
To maximize their impact, the Bank has developed a framework that redirects SDRs 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 lies in its potential for four-fold leveraging; however, being hybrid capital, combined with co-financing from our triple-A rated financial institution, the actual leverage could reach up to eight times.”
The framework designed by the Bank ensures that SDRs maintain their status as reserve assets and includes mechanisms for fund retrieval should beneficiaries experience liquidity issues. Adesina asserts that these solutions have garnered approval from both staff and the board. “We are wholeheartedly pursuing this, and I’m genuinely optimistic… we must remain adaptive with our instruments and utilize them to maximize global benefits,” he emphasizes.
Optimist-in-chief fears insecurity
Referring to himself as Africa’s “optimist in chief,” Adesina expresses his commitment to using the Bank’s influence to advance the continent’s interests.
“I have high hopes for Africa, as I am confident in its capacity, potential, and the pressing need for Africa to assert its identity on the global stage and unlock its abundant assets. The goal is to continue accelerating progress and delivering results,” he asserts. However, he also recognizes his concerns regarding threats to peace and security. Recent years have seen escalating instability across the continent, highlighted by severe conflicts in Ethiopia and Sudan, as well as coups and unrest in the Sahel.
Many underlying political tensions stem from the lack of jobs and opportunities for Africa’s burgeoning youth population. While allocating resources to address some immediate consequences and causes, the Bank is also exploring 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 implementing what we call Youth Entrepreneurship Investment Banks.”
These banks will offer financial assistance, technical guidance, and incubation services for youth-driven ventures, providing equity, debt, and other financial instruments while supporting them throughout their business development phases. The Bank’s board of directors has approved an 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 identify new and innovative pathways to accomplish its foundational mission while navigating the ever-changing global and local economic landscape. Adesina remains confident that the Bank will continue to play a pivotal role in Africa’s resurgence.
“I firmly believe that the African Development Bank must keep enhancing its capacity across all these areas. We have made significant progress thus far, but I am convinced we need to achieve even more as we move forward,” he pledges.