Spurred by the spreading spectre of starvation in Africa, the African Development Bank is making a belated shift away from the continent's massive development projects of the recent past and will concentrate instead on increasing food production, the bank's newly elected president says.
The small bank is also at a major crossroads of development, as its 50 member nations face the dilemma of whether to open up the bank's membership to non-African shareholders, thereby gretly increasing the institution's loan capacity and participation in Africa's development efforts.
Of immediate concern is Africa's 3 percent annual population growth that is rapidly outstripping its meager one percent yearly increase in food production. For the next decade, developmental experts are forecasting wid-spread problems of hunger and multiple malnutrition diseases -- on a continent that is already plagued by drought and wars and is home to 4.5 million of the world's estimated 10 million refugees.
African leaders' "realization about food production has almost come too late," said bank president Willa d. Mung'omba. "Food, health and education haven't received the attention they should have" by African development bank officials themselves, Mung'omba acknowledged in an interview. d
Mung'omba is visiting Washington this week to lobby in the sessions of the annual World Bank meeting for increased assistance to the African Bank's small-loan program and a doubling of grants to its low-interest "soft loan" adjunct, the African Development Fund.
"Food (production) has got to be our priority," said Mung'omba, "but the (African) bank is in an unfortunate position. We can't lend as much as, say, the Asian Development Bank," added the 45-year-old banker, who was sworn in as African Bank president on Sept. 1.
Since the African Bank was founded in 1966, more than 80 percent of its outstanding loans of $1.1 billion has gone to large transport, public utility and industrial development projects in Africa. The remaining 20 percent has been thinly spread among its member states for pilot agricultural and social service projects, such as rural health centers.
In addition, the African Bank has been stymied by very limited borrowing access in the commercial money markets. Western and Asian bankers lack confidence in the economic stability of many of the bank's guarantors, Africa's 50 independent states.
Even with the new emphasis on agricultural production, the bank's loan capacity is a miniscule $285 million annually compared with the billions of dollars loaned yearly by such development-orientated institutions as the Asian Development Bank or the Inter-American Development Bank.
When begun, the African Development Bank was viewed as an all-African bank that would fund small projects on the continent that institutions such as the World Bank would not handle. The founders wrote into the bank's charter that only independent African countries could buy shares.
Since the late 1970s, however, as rising energy costs have eaten into the bank's and member nations' coffers, a majority of the bank's officials have argued for a revision of the charter to allow for sale of one-third of the bank's sahres to western and Asian governments. The sale, they said, would substantially increase the bank's credit-worthiness and allow the bank to borrow heavily on commercial money markets.
Supporters of selling a portion of the bank's shares to non-Africans, voting according to their percentage of sahres, have mustered 53 percent of a needed 75 percent vote to revise the charter.
Only Egypt, of the four largest shareholders, has voted to support the move. Of the other three, a vote in favor by one would tip the balance in favor of revision. Libya announced at the bank's annual meeting last June that it was unalterably opposed to the proposal, Algeria has not taken a position and Nigeria, which was "an ardent" supporter of the sale a year ago, has cooled considerably.
"All of the African countries realize that if western powers come in, even if their share is limited to one third, they will exercize an inordinate influence on the bank's decisions," said one bank official. "Some countries are having misgivings about that."
One cause for a reluctance to allow non-Africans into the bank is the reported demand by one European country that one-third of the bank's 700-member staff, which is now all African, reflect the participation of the new shareholders, the official added.
Bank president Mung'omba, who is known to favor the charter revision but declined to comment on the split in the bank, disagreed that western governments would exercise an "inordinate" influence in the bank. "Their influence will be limited to their one-third share," he said. "The important thing," he continued, "is to maintain the African character of the bank where the chief executive, board of directors, staff must, at a minimum, occupy two-thirds of all positions."
Both western and Asian governments have expressed an interest in buying shares in the bank, said Mung'omba. "I expect the charter revision to go through by the end of next year," he added. He denied that any European country had already made staff demands.