Former Mauritanian Finance Minister Sidi Ould Tah has been elected president of the African Development Bank (AfDB), the lender said on Thursday, after a poll during the bank’s annual meeting in Ivory Coast.
He will replace Akinwumi Adesina, a Nigerian economist who will step down in September after completing the maximum two five-year terms in office.
The AfDB, which has $318 billion in capital, is owned by 54 African states and non-regional nations including the U.S., Japan and Saudi Arabia. Its biggest shareholder is Nigeria.
Tah will take over as the bank grapples with Washington’s plans to cut $555 million in funding to its African Development Fund (ADF), which offers low-priced financing to more than 30 of the continent’s poorest nations.
“African economies are under immense pressure, facing multiple crises like rising debt burdens, climate shocks, inflation and limited fiscal space,” said Serah Makka, executive director for Africa at One, a group that campaigns against extreme poverty.
Between sclerotic infrastructure and climate investment needs, African nations have huge financing needs. The AfDB has pegged the annual financing gap for structural transformation at more than $400 billion – or nearly 14% of the continent’s projected GDP by 2030.
The bank is aiming to raise $25 billion in its current replenishment round, which concludes in November. The last round, three years ago, raised $8.9 billion.
LOST CASH
Tah will have to either persuade the U.S. to reinstate the funding or seek to replace the lost cash elsewhere, either from other African members or wealthier countries outside the continent who want a bigger say in the bank’s activities, such as Saudi Arabia, the United Arab Emirates or China, analysts said.
Apart from constrained funding sources, the president-elect will also have to help heavily indebted African economies avert potential debt distress and meet historically high investment needs despite limited access to international funding.
The AfDB is in the process of helping to set up a financial stability mechanism (AFSM) for the continent to prevent countries from tipping into debt-induced crises.
“The AFSM directly responds to one of Africa’s most pressing financial vulnerabilities, the rising burden of short-term, non-concessional debt that threatens economic stability across the continent,” Makka said, adding that the continent’s cost of capital is often 5 to 8 percentage points higher than that of developed countries.
Tah will also help African nations steer through the turmoil caused by U.S. trade tariffs, volatility in the prices of commodities such as oil – a core revenue source for several countries – and risk aversion from some investors that could make it tough to keep money flowing into the continent.
