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Managing strategy and innovation at a multilateral development bank


Emeka Uzoigwe, Director and Global Head, Strategy and Innovation, at Afreximbank, explains 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 grow trade but also increasingly to solve 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 the strategic direction of the bank is quite straightforward in that the Bank’s mandate is clear: it is to facilitate, promote and expand intra-African and extra-African trade. The mandate therefore sets the parameters within which they operate, but the fact that the trade finance gap is estimated at between $80-120bn annually, these parameters are actually quite broad.


The Bank operates through 5-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 last five year plan, Uzoigwe adds, the Bank focused on four pillars: “intra African trade, which would support that African continental free trade area, including fixing key elements such as cross border payments in Africa. The second pillar was industrialisation and export development, which is looking at soft and hard infrastructure, taking learnings from the Asian tigers, and some of the things they did but also exploiting that opportunity of the jobs that we said will move on from China. The third pillar, trade finance leadership, is looking at how we expand and deepen trade finance offerings, and improve capacity of Africans in trade finance. The last strategic pillar is financial soundness and performance, which is looking how we can maintain financial strength to enable the Bank to make a meaningful impact in Africa and on African trade.”

Cushioning the 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 2009/2010 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 has shown that it is systemically important to Africa. He explains that, as the Covid crisis took hold of global markets, within 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 hands-on 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 stabilize 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 puts it slightly differently and 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 – its staff has nearly trebled in the past five years – 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 enabler 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 paid 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. His comments seem sincere and he says that the leadership, from the President to his VPs, do 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.


They also use other tools to drive ideas within their teams, including normal innovation funnel in terms of ideation, having whiteboard sessions, using all the different digital tools that exist today to brainstorm and exchange information. Part of the responsibility of his teams, he explains, is keep a tab on what is happening across different markets to help understand what is happening elsewhere, in the field of banking and elsewhere.


They also understand it’s not a simple copy and paste. Their solutions are unique to African problems and there’s a strong belief within the institution that it is African-led solutions that will solve African problems. They also know that collaboration is key and that’s why a lot of what they do partnering with stakeholders as well as open innovation with APIs to ensure they and others can plug into the ecosystem.


Certainly as part of our future growth and digital business model, the Bank will scale its services through external collaboration and partnerships. That is the general trend globally.”


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 ecommerce. There are many more areas when 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.




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