MANAGING STRATEGY AND INNOVATION AT A MULTILATERAL DEVELOPMENT BANK
Emeka Uzoigwe, Director and Global Head, Strategy and Innovation, at Afreximbank, explains to Omar Ben Yedder the thinking behind the bank’s current five-year plan and what propels its culture of innovation
The Afreximbank, as a multilateral development bank, has always had a wider remit than providing loans. It was created to support its member states in growing trade but also focuses increasingly on solving complex structural problems that are holding back African growth.
The strategic direction of the Bank has been cemented by the numerous projects it has undertaken in the past few years to tackle these structural problems by helping provide some of the solutions to overcome the bottlenecks and constraints related to trade, investment, and the growth of some key industries.
Increasingly, many of these solutions require a complete rethink of the system and business models with innovation a critical cog to help provide these breakthroughs. Emeka Uzoigwe, Global Head of Innovation and Strategy at the Bank, says that devising its strategic direction is quite straightforward as the Bank’s mandate is clear: it is to facilitate, promote and expand intra-African and extra-African trade. The mandate sets the parameters within which they operate, but the fact that the trade finance gap is estimated at $80-120bn annually means these parameters are actually quite broad.
The Bank operates through five-year strategic plans, as Uzoigwe explains: “We use strategic planning as an instrument to advance our medium- to long-term corporate goals and have been using five-year rolling strategic plans as a guide towards achieving those goals. We are currently on the fifth Strategic Plan, which runs from 2017 until 2021, and this was premised on a couple of important things.
“The first one was the realisation that the political will, for the first time, had reached the highest level in terms of bringing Africa under the AfCFTA.
So, the exogenous factors were fundamental and advanced such that Afreximbank could not simply overlook that.
“The second element around was migration of low cost jobs [out of China]… And therefore, we looked at light manufacturing as an important element.”
On setting out the plan, the Bank focused on four pillars: promote interAfrican trade; facilitate industrialisation and export development; strengthen trade finance leadership; improve financial performance and soundness.
Cushioning impact of Covid
The Bank has become an important actor in helping realise the benefits of the AfCFTA. Additionally, as a development bank, it has also had to react at pace to exogenous factors to support its member states. This was the case in 2009-10 when credit markets seized up for many emerging markets including in Africa, and once again following a global shutdown during the months when the pandemic took hold in 2020.
Uzoigwe goes as far as saying that the Bank’s interventions have shown that it is systemically important to Africa. He explains that, as the Covid crisis took hold of global markets, within a few days the leadership at the Bank devised a potential support product to help industries and countries that would be adversely impacted by the crisis:
“Within four days, under the leadership of the president, who was handson in the development of the product, we took a product to the board and got that product approved, and we launched it to the market to help the member states in the continent to stabilise and cushion the impact of Covid.”
Development banks, and banks whose shareholders are effectively sovereign states, don’t have a reputation for being nimble and innovative. How hard has it been to bring in a culture of innovation, of rule breakers, in an institution such as Afreximbank?
Uzoigwe explains that the culture at the Bank is more about being bold and ambitious to solve big problems, and to play a transformational role. He adds that the leadership is dynamic and, as importantly, supportive of new ideas, as long as they’re well thought out and they address the key constraints holding back trade.
Despite what many may think of DFIs, he argues, they actually move
pretty quickly at the Afreximbank. “I think the ethos is think big. We make big ideas come to life. We execute in a nimble way, of course, based on heavy data and knowledge and also break boundaries but with a belief that this will transform Africa.”
As the Bank has grown, what profile do they seek to deliver on all these ideas and products they’re developing? The innovation team was set up in 2016, he explains, but more than technical skills, what they wanted were problem solvers with experience in commercial-facing roles. This, he expounds, is to ensure that innovation is geared towards providing solutions to clients, as well as having a digital mindset to leverage digital technologies as enablers to leapfrog Africa’s development.
But what is critically important is the need to ensure there is a diversity of voice and views. So in their recruitment policy, they pay a lot of attention to the geographic distribution of their team, to ensure a blend of experiences, a blend of age groups and a blend of people from similar development banking backgrounds as well as others from commercial banks, consulting and fintechs.
As well as fusing these different skills sets, to make things gel, “it’s important to support your teams and give them the room to execute and then use robust debate and openness as you develop strategies.”
What about failure, when projects and ideas don’t work out; is the leadership comfortable with this? Uzoigwe affirms that experimentation is a vital part of innovation. The culture they encourage within the Bank is “fail fast, learn fast” and to ensure the teams are not discouraged from not succeeding with a particular concept.
Uzoigwe adds that leading the innovation and strategy teams is easy within the Bank because the leadership gets it. He says that the leadership, from the president to his VPs, spend a lot of time with the innovation teams, challenging their ideas and critically commenting their proposals. It can slow the process down a bit, but it shows that there is engagement at the highest level and it means that ideas are scrutinised before being executed.
Reasons for hope
When he sees what’s happening on the continent especially in terms of fintech, does it give him reason for hope? Yes, he answers but he would like to see more. There is over-concentration in areas such as payments and e-commerce. There are many more areas where innovation and the use of digital technologies can be transformational, such as developing solutions for predicting weather patterns and yields from certain soil types.
“We need to diversify innovation to multiple other industries and sectors and develop scalable, innovative solutions that solve African problems. So, while our progress as a continent in innovation gives me hope, I believe we have much more to do.”
Expect to see more activity from the Bank whose ambitions only seem to grow with time. ■
“We need to diversify innovation to multiple other industries and sectors and develop scalable, innovative solutions that solve African problems”