A former Vice President of the African Development Bank, Bisi Ogunjobi, in this interview with SUNDAY ABORISADE, cautions the Federal Government on constant taking of external loans to carry out development projects
How did you start your career?
After graduation, I worked briefly with Bentworth Nigeria Limited, Lagos, before I joined the Central Bank of Nigeria, in January 1971. I was at the Research Department of the bank before I was seconded to the Conference on International Economic Cooperation, better known as the North South Dialogue in Paris, France, as adviser on finance and development to the 27 developing countries negotiating with the developed countries. My international exposure paved the way for me to join the African Development Bank in Abidjan, Cote d’Ivoire, as an economist in 1978, where I rose to the highest professional career level of vice president of the bank. I was in the bank for 28 years. As of the time of my retirement, I was vice president (operations) between 2002 and 2005. During my career at the bank, I worked at the operations, policy and the research departments. This made it possible for me to have an overview of the operations and activities of the bank. As the vice president of the bank, I was in charge of West Africa, Central Africa as well as North Africa. That equally enabled me to have a feel of all parts of the continent. I was once the regional director for Southern Africa. My experiences made me have a good feel of all the problems and challenges facing the continent.
By your assessment of African countries, can you say the bank plays a significant role when it comes to the various socio-economic challenges confronting the continent?
An international organisation like the AfDB is supposed to complement the activities of the government. So, we don’t expect that it is the financial institution that is going to change the various countries. Our roles are to complement their efforts, provide resources, give advice and help to develop their human capital. The implementation of developmental projects remains the responsibility of countries in question. The role of the bank is not to change the continent through massive provision of infrastructure but to complement the efforts of the government of the various countries on the continent to enhance positive change in the life of the ordinary man. The bank focuses on a number of issues, for instance, the environment. We are supporting what the government is doing to bring together all the development partners to support the issue of environment because poverty reduction is the key element in Africa. This means access to various facilities in terms of health, education, infrastructure, food production and agriculture. Those are the areas which the bank focuses on and supports government in being able to bring meaningful change and impact on the economic development of Africa.
By your assessment, have various African leaders, past and present, been able to effectively utilise the opportunities AfDB offered them?
Yes, I think so if one considers the various projects that were financed in many countries, take for example, in the areas of education. If you look at the state of education in most African countries, the rate of literacy has improved from the low level of between 20 to 25 per cent to between 80 and 90 per cent. For example, in one or two countries, we are looking at nearly 95 per cent. This is a very significant area of impact of AfDB and other donor agencies in supporting the policies of the government, even in Nigeria where the number of universities has increased tremendously. So, to a large extent, there has been very significant improvement in access to education in most African countries. Of course, people talk of quality of education which varies from country to country. In the area of infrastructure development, airports in East and Southern Africa were actually built with support from the AfDB in Lesotho, Swaziland, Maputo, and Zambia as well as in Malawi. In certain areas, the bank has been very supportive. More importantly, in recent time, when the state was moving away from production activities, we came to the support of the private sector. The private sector arm of the AfDB has been very active and supportive by providing large resources to stimulate the development of the private sector. Even the current policies of the bank, as enunciated by Dr. Akinwunmi Adesina, are geared towards identifying what he called, the ‘high fives.’ These are: Feed Africa, Light Africa, Human Resources, Health and Education. The provision of infrastructure is also part of the bank’s focus. These are key features of economic development. Emphasis may vary from time to time depending on the focus of individual governments and the nature of the grants offered them by donor agencies.
To what extent will you say the AfDB has been able to sustain its support to the various African countries?
To a great extent I will say the AfDB has been a success story. It started with a working capital of about $250m. Today, it has a working capital of about $15bn and it still continues to borrow from the international market at a very fine rate. This allows African countries to borrow at very low and competitive interest rates. Currently, the bank is supporting the reform programme going on in Nigeria with nearly $1bn. Six hundred million dollars out of the amount has actually been disbursed. The bank has been impactful not just in Nigeria but also in other African countries in the pursuit of its economic development.
What is the implication of the Federal Government’s continuous taking of external loans?
People are using two different criteria on debt sustainability. If you look at the level of resources in your country to service the loans, I think it is extremely very high. If you are looking at it from that perspective, then it is not sustainable. But if you are looking at it from the perspective of the ratio of your GDP, and it is lower than the standard, then you can justify your action but what is most important is, how many resources you commit to servicing external loans; that is immediate and it is impactful. So, there is a need for serious caution by the Nigerian government in our external borrowing. Government should generate more resources locally instead of relying on foreign loans.
The title of one of the two books you wrote is ‘African Development Paradigms.’ What is the book all about?
The book looks at the issues that impact very strongly on the economic development of Africa. First is domestic resource mobilisation. To a large extent, we have depended largely on support from external borrowing but when we look at the domestic resource mobilisation – that is in terms of savings, this is an area that we have been very weak. We, therefore, need to see how we can re-refocus our efforts in that area so that we can mobilise resources domestically to support whatever we may get from outside, in doing that, it means that the country’s GDP has to grow because the economy too must grow to cultivate the habits of saving so that there would be domestic local resources to support that. The other is good governance which is responsible for economic development all over the world. If a government is corrupt, then there would be a lot of problems. The issue of governance and domestic resource mobilisation are some of the key issues that we have highlighted in the shift in paradigms that we are looking at.
The second book, Transformative Paradigms in Africa’s Development, covers a wide range of issues in the African development discourse. It examines various socio-economic contexts and experiences that constitute obstacles to the development of Africa. Significantly, also, it proposes critical ways of dealing with the many challenges hampering Africa’s development. The book is divided into three different parts. The first engages Afro-centric development issue. In it, the paper titled, ‘Mobilising Resources for Sustainable Development in Africa’, posits that mobilising domestic and foreign finance capital is a sine qua non for addressing development issues on the continent. But this has been difficult to achieve due to macroeconomic uncertainties, bureaucratic bottlenecks, and underdeveloped financial and capital markets. African countries are generally small, low-income economies and are therefore unable to compete on equal terms with the developed countries in the global market with regard to the ability to attract private capital flows. I have thus urged African countries to strive towards mobilising resources generated within the continent for their economic growth.
Why did you decide to write and present two books to the public on the same day?
The second book is about my 28-year journey in AfDB. It focuses more on how my life has been in AfDB in pursuit of African development. I am looking at it from the fact that I worked in virtually all the regions of African continent. I have also worked in all aspects of banking. I worked for a development bank; I worked for an Islamic bank; I worked for a mortgage bank; and I also worked for the Central Bank of Nigeria. My life has always been in the areas of banking and development. That is the journey the book looks at and also how in the course of my career, I have been able to have an impact on what those institutions have been able to do.
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