African Development Bank
Encyclopedia
The African Development Bank Group (French
: Banque africaine de développement / Portuguese
: Banco Africano de Desenvolvimento) is a development bank
established in 1964 with the intention of promoting economic and social development in Africa
. The Group comprises the African Development Bank (AfDB), the African Development Fund (ADF), and the Nigeria Trust Fund (NTF).
AfDB provides loans and grants to African governments and private companies investing in the regional member countries (RMC) in Africa. It is owned and funded by member governments, and has a public-interest mandate to reduce poverty
and promote sustainable development
.
in Africa, growing desire for more unity within the continent led to the establishment of two draft charters, one for the establishment of the Organisation of African Unity (established in 1963, later replaced by the African Union
), and for a regional development bank.
A draft accord was submitted to top African officials, then to African Ministers, before being cosigned by twenty-three African governments on August 4, 1963, in the form of an agreement establishing the African Development Bank. The agreement came into force on 10 September 1964. Although established officially in under the auspices of the Economic Commission for Africa, the AfDB began operation in 1966 with its headquarters in Abidjan
, Côte d'Ivoire
.
Although originally only African countries were able to join the bank, since 1982 it has allowed the entry of non-African countries as well.
During its forty years of operations, AfDB has financed 2 885 operations, for a total of $47.5 billion. In 2003, it received an AAA rating from the major financial rating agencies
and had a capital of $32.043 billion.
s and equity investments for the economic and social advancement of the regional member countries (RMC). Second, it provides technical assistance for the preparation and execution of development projects and programs. Third, it promotes investment of public and private capital for development purposes. Fourth, it assists in coordinating development policies and plans of RMCs. The AfDB is also required to give special attention to national and multinational projects and programs which promote regional integration.
In 2005, AfDB approved loans in the amount of 2.29 billions of Units of Account, a value defined in accordance to a basket of currencies equal to the Special Drawing Rights
of the International Monetary Fund
.
The largest share of AfDB lending goes to infrastructure
projects, followed by multisector operations, which are usually loans for various policy reforms or general budget support for a government. AfDB support for infrastructure, private sector
development, and the extractive industries (particularly mining
) is expected to increase over the coming years.
is the main aim of ADF activities. Twenty-four non-African countries along with the AfDB constitute its current membership. The largest ADF shareholder is the United States
with approximately 6.5 percent of the total voting shares, followed by Japan
with approximately 5.4 percent.
The ADF’s general operations are decided by a Board of Directors, six of which are appointed by the non-African member states and six designated by the AfDB from among the bank's regional Executive Directors.
The ADF’s sources are mainly contributions and periodic replacements by non-African member states. The fund is usually replenished every three years, unless member states decide otherwise. The total donations, at the end of 1996, amounted to $12.58 billion. The ADF lends at no interest rate, with an annual service charge of 0.75%, a commitment fee of 0.5%, and a 50-year repayment period including a 10-year grace period
. The Tenth United Kingdom
replenishment of the ADF was in 2006.
The NTF uses its resources to provide financing for projects of national or regional importance which further the economic and social development of the low-income RMCs whose economic and social conditions require financing on non-conventional terms. In 1996, the NTF had a total resource base of $432 million. It lends at a 4% interest rate with a 25-year repayment period, including a five year grace period.
Mr. Donald Kaberuka
is the 7th elected President of the African Development Bank Group, having taken the oath of office on September 1, 2005. He chairs the Boards of both the African Development Bank and the African Development Fund. Mr. Kaberuka is a former finance minister of Rwanda
.
Member governments are officially represented at the AfDB by their Minister of Finance, Planning or Cooperation who sits on the AfDB Board of Governors. The AfDB Governors meet once a year (at the Annual Meetings of the AfDB each May) to take major decisions about the institution’s leadership, strategic directions and governing bodies. The Governors typically appoint a representative from their country to serve in the offices of the AfDB’s Board of Executive Directors.
Day-to-day decisions about which loans and grants should be approved and what policies should guide the AfDB’s work are taken by the Board of Executive Directors. Each member country is represented on the Board, but their voting power and influence differs depending on the amount of money they contribute to the AfDB.
AfDB commits approximately $3 billion annually to African countries, equivalent to only about 6% of development aid to the continent. Its relatively small lending portfolio and its tendency to follow in the footsteps of larger, more prominent public institutions like the World Bank
, has meant that the AfDB has received little attention from civil society organizations as well as academia.
AfDB has placed an emphasis on the role of women, education and structural reforms, and lent its support to key initiatives such as debt alleviation for Heavily Indebted Poor Countries
and the New Partnership for Africa's Development
(NEPAD).
The Bank is currently based in Tunis
, Tunisia
after relocating from its headquarters in Abidjan
, Ivory Coast because of instability there. It employs approximately 1,020 employees as of 2007, and has 78 members: 53 countries in Africa and 25 American, European, and Asian countries.
The infrastructure sector, including power supply
, water
and sanitation, transport
and communications
, has traditionally received the largest share of AfDB lending. This focus was re-affirmed in the AFDB’s 2003-2007 Strategic Plan, which identified infrastructure as a priority area for AfDB lending. In 2005, the AfDB approved 23 infrastructure projects for approximately $982 million, which totaled 40 percent of AfDB approvals that year. Given the increased attention to infrastructure development in Africa from donors and borrowers, it is likely that AfDB’s infrastructure lending will increase significantly in the coming years. In 2007, infrastructure operations accounted for approximately 60 percent of the bank's portfolio.
Regional integration
infrastructure projects will also be a key part of the AfDB’s future business. According to the AfDB’s 2005 Annual Report, regional economic blocs will make Africa “more competitive in the global market”, while transport and power interconnections between smaller African economies will help create larger markets within the continent. The AfDB’s member countries claim that AFDB, as a multilateral institution, is particularly suited to support regional integration projects.
The AfDB has also been designated the lead agency to facilitate "NEPAD infrastructure initiatives", which are regional integration projects led by African Regional Economic Communities
(RECs). Additionally, the AfDB hosts the Infrastructure Consortium for Africa (ICA). The ICA was established by G8
countries to coordinate and encourage infrastructure development in Africa, focusing on regional infrastructure development in particular. The AfDB also helps to prepare projects so they may obtain financing from others sources through an initiative called the Infrastructure Project Preparation Facility (IPPF). So even if the AfDB is not directly involved in financing a particular infrastructure project, it may have helped to make that project possible.
Another key area of concentration of the AfDB’s support of RMCs is the fight against HIV
/AIDS
. The AfDB has five policies towards securing Africa's future through health funding:
To date, the bank's contribution in the fight against HIV/AIDS is estimated at over UA 500 million. The bank is also among the initiating partners of AIDS in Africa – Scenarios for the future, a project whose outcome will enable governments and development partners alike to make strategic choices of current and future development paths and define their activities accordingly in order to face the challenges posed by HIV/AIDS.
Energy projects are likely to become a more important area of the AFDB’s infrastructure work, given the lack of access to energy services across Africa and continued high oil prices affecting oil-importing countries. It is not clear if the AFDB’s role in the energy sector will prioritize energy projects for domestic consumption or for export, although the AfDB has supported both in the past. The AFDB is currently drafting an energy policy and developing its contribution to the G8-mandated Clean Energy Investment Framework.
Although there is no official statement or consensus to this effect, AFDB lending for agriculture, (non-infrastructure) rural development and social sectors, such as health and education, is reportedly likely to decrease over the coming years.
, an independent Washington
think tank
, release a report in September 2006 that offered six recommendations for Bank's president and board of directors on broad principles to guide the Bank’s renewal. The report contains six recommendations for management and shareholders as they address the urgent task of reforming Africa’s development bank. Prominent among the recommendations is a strong focus on infrastructure.
AfDB is still a relatively small source of development finance for Africa. According to the most recent figures, the AfDB provides only 6 percent of total development assistance to the continent. Through its International Development Association (IDA), the World Bank annually approves about four times more in low-interest loans and grants to Africa than the AfDB does. The AfDB lacks the financial resources, the staff capacity and the range of staff skills and experience of the World Bank. For example, at the World Bank there are more than four times the number of staff working on any given project than at the AfDB. A number of the AfDB's projects, especially its policy loans, are financed jointly with the World Bank and other donors. The AfDB also relies extensively on World Bank research and analysis. As a larger institution and often the lead financier on joint projects, the World Bank attracts more attention than the AFDB.
While the AFDB’s lending had not expanded significantly in recent years, 2006 figures indicate that things may be changing. Between 2005 and 2006, the AfDB’s lending activities increased by more than 30 percent to $3.4 billion. Over the same period, private sector operations doubled in value. The AFDB has specific mandates from the New Partnership for Africa’s Development (NEPAD) and other international organizations to take the lead amongst financial and development institutions in areas such as infrastructure, regional integration, and bank
ing and financial standards in Africa. These mandates have also increased the AFDB’s profile in the media. The increased international emphasis on Africa’s development needs in recent years (for example, surrounding the 2005 Gleneagles G8 Summit
), and on the importance of infrastructure investment in Africa, has highlighted the role of the AfDB.
Some research has indicated that a high percentage of respondents in African countries has a marked preference for additional aid from the African Development Bank, despite the fact its relatively low rating against most of the aid effectiveness
criteria found to be important by donor recipients. This suggests that donor recipients in Africa views on the ‘multilateral donor of choice’ are informed by additional aid effectiveness criteria that are not commonly identified or reported against, though exactly what those criteria have not been discussed.
In general, whereas there has been progress at all levels with regard to democracy, growth and restoring the macro-economic
balances in Africa over the past fifteen years, half of sub-Saharan Africa lives on under one dollar a day, and AIDS is threatening the social fabric of the continent. The studies conducted by various organizations (including the African Development Bank and the World Bank) show that, with the exception of northern and southern Africa, the United Nations
Millennium Development Goals
(reducing by half the number of persons living in poverty and without access to potable water by 2015) will in most cases not be attained. Nevertheless, these same studies indicate that the majority of the African countries can make notable progress to these ends.
ADF Beneficiary Countries:
AFDB and ADF Beneficiary Countries:
Note: All countries in the African Union
including Mauritania
but excluding the SADR
are eligible for NTF benefits. Morocco
is also eligible though not a part of the African Union
.
Non-African Member Countries:
launched Development Business
in 1978 with the support of the World Bank
, and many other major development banks from around the world. Today, Development Business
is the primary publication for all major multilateral development banks including the African Development Bank, United Nations agencies, and several national governments, many of whom have made the publication of their tenders and contracts in Development Business
a mandatory requirement.
French language
French is a Romance language spoken as a first language in France, the Romandy region in Switzerland, Wallonia and Brussels in Belgium, Monaco, the regions of Quebec and Acadia in Canada, and by various communities elsewhere. Second-language speakers of French are distributed throughout many parts...
: Banque africaine de développement / Portuguese
Portuguese language
Portuguese is a Romance language that arose in the medieval Kingdom of Galicia, nowadays Galicia and Northern Portugal. The southern part of the Kingdom of Galicia became independent as the County of Portugal in 1095...
: Banco Africano de Desenvolvimento) is a development bank
Multilateral Development Bank
A multilateral development bank is an institution, created by a group of countries, that provides financing and professional advising for the purpose of development. MDBs have large memberships including both developed donor countries and developing borrower countries...
established in 1964 with the intention of promoting economic and social development in Africa
Africa
Africa is the world's second largest and second most populous continent, after Asia. At about 30.2 million km² including adjacent islands, it covers 6% of the Earth's total surface area and 20.4% of the total land area...
. The Group comprises the African Development Bank (AfDB), the African Development Fund (ADF), and the Nigeria Trust Fund (NTF).
AfDB provides loans and grants to African governments and private companies investing in the regional member countries (RMC) in Africa. It is owned and funded by member governments, and has a public-interest mandate to reduce poverty
Poverty reduction
Poverty is the state of human beings who are poor. That is, they have little or no material means of surviving—little or no food, shelter, clothes, healthcare, education, and other physical means of living and improving one's life....
and promote sustainable development
Sustainable development
Sustainable development is a pattern of resource use, that aims to meet human needs while preserving the environment so that these needs can be met not only in the present, but also for generations to come...
.
History
Following the end of colonial periodDecolonization of Africa
The decolonization of Africa followed World War II as colonized peoples agitated for independence and colonial powers withdrew their administrators from Africa.-Background:...
in Africa, growing desire for more unity within the continent led to the establishment of two draft charters, one for the establishment of the Organisation of African Unity (established in 1963, later replaced by the African Union
African Union
The African Union is a union consisting of 54 African states. The only all-African state not in the AU is Morocco. Established on 9 July 2002, the AU was formed as a successor to the Organisation of African Unity...
), and for a regional development bank.
A draft accord was submitted to top African officials, then to African Ministers, before being cosigned by twenty-three African governments on August 4, 1963, in the form of an agreement establishing the African Development Bank. The agreement came into force on 10 September 1964. Although established officially in under the auspices of the Economic Commission for Africa, the AfDB began operation in 1966 with its headquarters in Abidjan
Abidjan
Abidjan is the economic and former official capital of Côte d'Ivoire, while the current capital is Yamoussoukro. it was the largest city in the nation and the third-largest French-speaking city in the world, after Paris, and Kinshasa but before Montreal...
, Côte d'Ivoire
Côte d'Ivoire
The Republic of Côte d'Ivoire or Ivory Coast is a country in West Africa. It has an area of , and borders the countries Liberia, Guinea, Mali, Burkina Faso and Ghana; its southern boundary is along the Gulf of Guinea. The country's population was 15,366,672 in 1998 and was estimated to be...
.
Although originally only African countries were able to join the bank, since 1982 it has allowed the entry of non-African countries as well.
During its forty years of operations, AfDB has financed 2 885 operations, for a total of $47.5 billion. In 2003, it received an AAA rating from the major financial rating agencies
Credit rating agency
A Credit rating agency is a company that assigns credit ratings for issuers of certain types of debt obligations as well as the debt instruments themselves...
and had a capital of $32.043 billion.
Functions
The AfDB has four principal functions. First, it makes loanLoan
A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower....
s and equity investments for the economic and social advancement of the regional member countries (RMC). Second, it provides technical assistance for the preparation and execution of development projects and programs. Third, it promotes investment of public and private capital for development purposes. Fourth, it assists in coordinating development policies and plans of RMCs. The AfDB is also required to give special attention to national and multinational projects and programs which promote regional integration.
In 2005, AfDB approved loans in the amount of 2.29 billions of Units of Account, a value defined in accordance to a basket of currencies equal to the Special Drawing Rights
Special Drawing Rights
Special Drawing Rights are supplementary foreign exchange reserve assets defined and maintained by the International Monetary Fund . Not a currency, SDRs instead represent a claim to currency held by IMF member countries for which they may be exchanged...
of the International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...
.
The largest share of AfDB lending goes to infrastructure
Infrastructure
Infrastructure is basic physical and organizational structures needed for the operation of a society or enterprise, or the services and facilities necessary for an economy to function...
projects, followed by multisector operations, which are usually loans for various policy reforms or general budget support for a government. AfDB support for infrastructure, private sector
Private sector
In economics, the private sector is that part of the economy, sometimes referred to as the citizen sector, which is run by private individuals or groups, usually as a means of enterprise for profit, and is not controlled by the state...
development, and the extractive industries (particularly mining
Mining
Mining is the extraction of valuable minerals or other geological materials from the earth, from an ore body, vein or seam. The term also includes the removal of soil. Materials recovered by mining include base metals, precious metals, iron, uranium, coal, diamonds, limestone, oil shale, rock...
) is expected to increase over the coming years.
Group entities
The African Development Bank Group has two other entities: the African Development Fund (ADF) and the Nigeria Trust Fund (NTF).African Development Fund
Established in 1972, the African Development Fund started operations in 1974. It provides development finance on concessional terms to low-income RMCs which are unable to borrow on the non-concessional terms of the AfDB. In harmony with its lending strategy, poverty reductionPoverty reduction
Poverty is the state of human beings who are poor. That is, they have little or no material means of surviving—little or no food, shelter, clothes, healthcare, education, and other physical means of living and improving one's life....
is the main aim of ADF activities. Twenty-four non-African countries along with the AfDB constitute its current membership. The largest ADF shareholder is the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
with approximately 6.5 percent of the total voting shares, followed by Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
with approximately 5.4 percent.
The ADF’s general operations are decided by a Board of Directors, six of which are appointed by the non-African member states and six designated by the AfDB from among the bank's regional Executive Directors.
The ADF’s sources are mainly contributions and periodic replacements by non-African member states. The fund is usually replenished every three years, unless member states decide otherwise. The total donations, at the end of 1996, amounted to $12.58 billion. The ADF lends at no interest rate, with an annual service charge of 0.75%, a commitment fee of 0.5%, and a 50-year repayment period including a 10-year grace period
Grace period
A grace period is a time past the deadline for an obligation during which a late penalty that would have been imposed is waived. Grace periods, which can range from a number of minutes to a number of days or longer, depending on the context, can apply in various situations, including arrival at a...
. The Tenth United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
replenishment of the ADF was in 2006.
Nigeria Trust Fund
The Nigeria Trust Fund (NTF) was established in 1976 by the Nigerian government with an initial capital of $80 million. The NTF is aimed at assisting in the development efforts of the poorest AfDB members.The NTF uses its resources to provide financing for projects of national or regional importance which further the economic and social development of the low-income RMCs whose economic and social conditions require financing on non-conventional terms. In 1996, the NTF had a total resource base of $432 million. It lends at a 4% interest rate with a 25-year repayment period, including a five year grace period.
Management and control
The AfDB is controlled by a Board of Executive Directors, made up of representatives of its member countries. The voting power on the Board is split according to the size of each member's share, currently 60%-40% between African (or "regional") countries and “non-regional” member countries (“donors”). The largest African Development Bank shareholder is Nigeria with nearly 9 percent of the vote. All member countries of the AfDB are represented on the AfDB Board of Executive Directors.Mr. Donald Kaberuka
Donald Kaberuka
Donald Kaberuka is a Rwandan economist and the current president of the African Development Bank.Kaberuka was born in Byumba, Rwanda. He was educated at universities in Tanzania and the United Kingdom and received a PhD degree in economics from the University of Glasgow. He worked in banking and...
is the 7th elected President of the African Development Bank Group, having taken the oath of office on September 1, 2005. He chairs the Boards of both the African Development Bank and the African Development Fund. Mr. Kaberuka is a former finance minister of Rwanda
Rwanda
Rwanda or , officially the Republic of Rwanda , is a country in central and eastern Africa with a population of approximately 11.4 million . Rwanda is located a few degrees south of the Equator, and is bordered by Uganda, Tanzania, Burundi and the Democratic Republic of the Congo...
.
Member governments are officially represented at the AfDB by their Minister of Finance, Planning or Cooperation who sits on the AfDB Board of Governors. The AfDB Governors meet once a year (at the Annual Meetings of the AfDB each May) to take major decisions about the institution’s leadership, strategic directions and governing bodies. The Governors typically appoint a representative from their country to serve in the offices of the AfDB’s Board of Executive Directors.
Day-to-day decisions about which loans and grants should be approved and what policies should guide the AfDB’s work are taken by the Board of Executive Directors. Each member country is represented on the Board, but their voting power and influence differs depending on the amount of money they contribute to the AfDB.
Status
With the statute of a regional multilateral development bank, the African Development Bank is engaged in promoting the economic development and social progress of its regional member countries in Africa.AfDB commits approximately $3 billion annually to African countries, equivalent to only about 6% of development aid to the continent. Its relatively small lending portfolio and its tendency to follow in the footsteps of larger, more prominent public institutions like the World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
, has meant that the AfDB has received little attention from civil society organizations as well as academia.
AfDB has placed an emphasis on the role of women, education and structural reforms, and lent its support to key initiatives such as debt alleviation for Heavily Indebted Poor Countries
Heavily Indebted Poor Countries
Heavily Indebted Poor Countries is a group of 40 developing countries with high levels of poverty and debt overhang which are eligible for special assistance from the International Monetary Fund and the World Bank.- History and structure :...
and the New Partnership for Africa's Development
New Partnership for Africa's Development
The New Partnership for Africa's Development is an economic development program of the African Union. NEPAD was adopted at the 37th session of the Assembly of Heads of State and Government in July 2001 in Lusaka, Zambia...
(NEPAD).
The Bank is currently based in Tunis
Tunis
Tunis is the capital of both the Tunisian Republic and the Tunis Governorate. It is Tunisia's largest city, with a population of 728,453 as of 2004; the greater metropolitan area holds some 2,412,500 inhabitants....
, Tunisia
Tunisia
Tunisia , officially the Tunisian RepublicThe long name of Tunisia in other languages used in the country is: , is the northernmost country in Africa. It is a Maghreb country and is bordered by Algeria to the west, Libya to the southeast, and the Mediterranean Sea to the north and east. Its area...
after relocating from its headquarters in Abidjan
Abidjan
Abidjan is the economic and former official capital of Côte d'Ivoire, while the current capital is Yamoussoukro. it was the largest city in the nation and the third-largest French-speaking city in the world, after Paris, and Kinshasa but before Montreal...
, Ivory Coast because of instability there. It employs approximately 1,020 employees as of 2007, and has 78 members: 53 countries in Africa and 25 American, European, and Asian countries.
Recent trends and directions
One of emerging views, repeatedly cited by the AfDB’s Board of Directors and management, is the view that the AfDB should be more “selective” and “country-focused” in its operations. Though this policy has still to be clearly defined, it appears to be driving certain lending priorities.The infrastructure sector, including power supply
Power station
A power station is an industrial facility for the generation of electric energy....
, water
Water supply
Water supply is the provision of water by public utilities, commercial organisations, community endeavours or by individuals, usually via a system of pumps and pipes...
and sanitation, transport
Transport
Transport or transportation is the movement of people, cattle, animals and goods from one location to another. Modes of transport include air, rail, road, water, cable, pipeline, and space. The field can be divided into infrastructure, vehicles, and operations...
and communications
Telecommunication
Telecommunication is the transmission of information over significant distances to communicate. In earlier times, telecommunications involved the use of visual signals, such as beacons, smoke signals, semaphore telegraphs, signal flags, and optical heliographs, or audio messages via coded...
, has traditionally received the largest share of AfDB lending. This focus was re-affirmed in the AFDB’s 2003-2007 Strategic Plan, which identified infrastructure as a priority area for AfDB lending. In 2005, the AfDB approved 23 infrastructure projects for approximately $982 million, which totaled 40 percent of AfDB approvals that year. Given the increased attention to infrastructure development in Africa from donors and borrowers, it is likely that AfDB’s infrastructure lending will increase significantly in the coming years. In 2007, infrastructure operations accounted for approximately 60 percent of the bank's portfolio.
Regional integration
Regional integration
Regional integration is a process in which states enter into a regional agreement in order to enhance regional cooperation through regional institutions and rules...
infrastructure projects will also be a key part of the AfDB’s future business. According to the AfDB’s 2005 Annual Report, regional economic blocs will make Africa “more competitive in the global market”, while transport and power interconnections between smaller African economies will help create larger markets within the continent. The AfDB’s member countries claim that AFDB, as a multilateral institution, is particularly suited to support regional integration projects.
The AfDB has also been designated the lead agency to facilitate "NEPAD infrastructure initiatives", which are regional integration projects led by African Regional Economic Communities
Regional Economic Communities
The Regional Economic Communities in Africa group together individual countries in subregions for the purposes of achieving greater economic integration...
(RECs). Additionally, the AfDB hosts the Infrastructure Consortium for Africa (ICA). The ICA was established by G8
G8
The Group of Eight is a forum, created by France in 1975, for the governments of seven major economies: Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States. In 1997, the group added Russia, thus becoming the G8...
countries to coordinate and encourage infrastructure development in Africa, focusing on regional infrastructure development in particular. The AfDB also helps to prepare projects so they may obtain financing from others sources through an initiative called the Infrastructure Project Preparation Facility (IPPF). So even if the AfDB is not directly involved in financing a particular infrastructure project, it may have helped to make that project possible.
Another key area of concentration of the AfDB’s support of RMCs is the fight against HIV
HIV
Human immunodeficiency virus is a lentivirus that causes acquired immunodeficiency syndrome , a condition in humans in which progressive failure of the immune system allows life-threatening opportunistic infections and cancers to thrive...
/AIDS
AIDS
Acquired immune deficiency syndrome or acquired immunodeficiency syndrome is a disease of the human immune system caused by the human immunodeficiency virus...
. The AfDB has five policies towards securing Africa's future through health funding:
- Institutional capacity building through assistance of policy/strategy formulation and implementation
- Human capital development to create an environment for the operation of national AIDS strategies through training and technical assistance support
- HIV/AIDS multi-sectoral responses with emphasis on prevention and control interventions that include IEC (Information, Education and Communication), STI (Sexually Transmitted InfectionsSexually transmitted diseaseSexually transmitted disease , also known as a sexually transmitted infection or venereal disease , is an illness that has a significant probability of transmission between humans by means of human sexual behavior, including vaginal intercourse, oral sex, and anal sex...
) control, VCT (Voluntary Counselling and Testing), infrastructure support for the establishment of laboratories and blood transfusion facilities, and provision of equipment and supplies, including antiretroviral drugAntiretroviral drugAntiretroviral drugs are medications for the treatment of infection by retroviruses, primarily HIV. When several such drugs, typically three or four, are taken in combination, the approach is known as Highly Active Antiretroviral Therapy, or HAART...
s - Advocacy through participation in international and regional forums to raise political commitment and leadership towards a collaborative effort in the fight against the pandemic among RMCs and development partners
- Partnership development with a view of forging new alliances and revitalizing existing collaboration to cover critical development concerns such as HIV/AIDS and to bringing partnership activities within the framework of the bank's vision
To date, the bank's contribution in the fight against HIV/AIDS is estimated at over UA 500 million. The bank is also among the initiating partners of AIDS in Africa – Scenarios for the future, a project whose outcome will enable governments and development partners alike to make strategic choices of current and future development paths and define their activities accordingly in order to face the challenges posed by HIV/AIDS.
Energy projects are likely to become a more important area of the AFDB’s infrastructure work, given the lack of access to energy services across Africa and continued high oil prices affecting oil-importing countries. It is not clear if the AFDB’s role in the energy sector will prioritize energy projects for domestic consumption or for export, although the AfDB has supported both in the past. The AFDB is currently drafting an energy policy and developing its contribution to the G8-mandated Clean Energy Investment Framework.
Although there is no official statement or consensus to this effect, AFDB lending for agriculture, (non-infrastructure) rural development and social sectors, such as health and education, is reportedly likely to decrease over the coming years.
Prospects
The AFDB today is an institution whose financial standing has been restored from the near collapse of 1995, but whose operational credibility remains a work-in-progress. A working group convened by the Center for Global DevelopmentCenter for Global Development
The Center for Global Development is a non-profit think tank based in Washington, D.C. that focuses on international development. It was founded in November 2001 by former senior U.S. official Edward W. Scott, director of the Peterson Institute for International Economics, C. Fred Bergsten, and...
, an independent Washington
Washington, D.C.
Washington, D.C., formally the District of Columbia and commonly referred to as Washington, "the District", or simply D.C., is the capital of the United States. On July 16, 1790, the United States Congress approved the creation of a permanent national capital as permitted by the U.S. Constitution....
think tank
Think tank
A think tank is an organization that conducts research and engages in advocacy in areas such as social policy, political strategy, economics, military, and technology issues. Most think tanks are non-profit organizations, which some countries such as the United States and Canada provide with tax...
, release a report in September 2006 that offered six recommendations for Bank's president and board of directors on broad principles to guide the Bank’s renewal. The report contains six recommendations for management and shareholders as they address the urgent task of reforming Africa’s development bank. Prominent among the recommendations is a strong focus on infrastructure.
AfDB is still a relatively small source of development finance for Africa. According to the most recent figures, the AfDB provides only 6 percent of total development assistance to the continent. Through its International Development Association (IDA), the World Bank annually approves about four times more in low-interest loans and grants to Africa than the AfDB does. The AfDB lacks the financial resources, the staff capacity and the range of staff skills and experience of the World Bank. For example, at the World Bank there are more than four times the number of staff working on any given project than at the AfDB. A number of the AfDB's projects, especially its policy loans, are financed jointly with the World Bank and other donors. The AfDB also relies extensively on World Bank research and analysis. As a larger institution and often the lead financier on joint projects, the World Bank attracts more attention than the AFDB.
While the AFDB’s lending had not expanded significantly in recent years, 2006 figures indicate that things may be changing. Between 2005 and 2006, the AfDB’s lending activities increased by more than 30 percent to $3.4 billion. Over the same period, private sector operations doubled in value. The AFDB has specific mandates from the New Partnership for Africa’s Development (NEPAD) and other international organizations to take the lead amongst financial and development institutions in areas such as infrastructure, regional integration, and bank
Bank
A bank is a financial institution that serves as a financial intermediary. The term "bank" may refer to one of several related types of entities:...
ing and financial standards in Africa. These mandates have also increased the AFDB’s profile in the media. The increased international emphasis on Africa’s development needs in recent years (for example, surrounding the 2005 Gleneagles G8 Summit
31st G8 summit
The 31st G8 summit was held from July 6 to July 8, 2005 at the Gleneagles Hotel in Auchterarder, Scotland, United Kingdom and hosted by British Prime Minister Tony Blair...
), and on the importance of infrastructure investment in Africa, has highlighted the role of the AfDB.
Some research has indicated that a high percentage of respondents in African countries has a marked preference for additional aid from the African Development Bank, despite the fact its relatively low rating against most of the aid effectiveness
Aid effectiveness
Aid effectiveness is the effectiveness of development aid in achieving economic or human development . Aid agencies are always looking for new ways to improve aid effectiveness, including conditionality, capacity building and support for improved governance.-Historical background:The international...
criteria found to be important by donor recipients. This suggests that donor recipients in Africa views on the ‘multilateral donor of choice’ are informed by additional aid effectiveness criteria that are not commonly identified or reported against, though exactly what those criteria have not been discussed.
In general, whereas there has been progress at all levels with regard to democracy, growth and restoring the macro-economic
Macroeconomics
Macroeconomics is a branch of economics dealing with the performance, structure, behavior, and decision-making of the whole economy. This includes a national, regional, or global economy...
balances in Africa over the past fifteen years, half of sub-Saharan Africa lives on under one dollar a day, and AIDS is threatening the social fabric of the continent. The studies conducted by various organizations (including the African Development Bank and the World Bank) show that, with the exception of northern and southern Africa, the United Nations
United Nations
The United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...
Millennium Development Goals
Millennium Development Goals
The Millennium Development Goals are eight international development goals that all 193 United Nations member states and at least 23 international organizations have agreed to achieve by the year 2015...
(reducing by half the number of persons living in poverty and without access to potable water by 2015) will in most cases not be attained. Nevertheless, these same studies indicate that the majority of the African countries can make notable progress to these ends.
Membership
AfDB Beneficiary Countries:ADF Beneficiary Countries:
AFDB and ADF Beneficiary Countries:
Note: All countries in the African Union
African Union
The African Union is a union consisting of 54 African states. The only all-African state not in the AU is Morocco. Established on 9 July 2002, the AU was formed as a successor to the Organisation of African Unity...
including Mauritania
Mauritania
Mauritania is a country in the Maghreb and West Africa. It is bordered by the Atlantic Ocean in the west, by Western Sahara in the north, by Algeria in the northeast, by Mali in the east and southeast, and by Senegal in the southwest...
but excluding the SADR
Sahrawi Arab Democratic Republic
The Sahrawi Arab Democratic Republic is a partially recognised state that claims sovereignty over the entire territory of Western Sahara, a former Spanish colony. SADR was proclaimed by the Polisario Front on February 27, 1976, in Bir Lehlu, Western Sahara. The SADR government controls about...
are eligible for NTF benefits. Morocco
Morocco
Morocco , officially the Kingdom of Morocco , is a country located in North Africa. It has a population of more than 32 million and an area of 710,850 km², and also primarily administers the disputed region of the Western Sahara...
is also eligible though not a part of the African Union
African Union
The African Union is a union consisting of 54 African states. The only all-African state not in the AU is Morocco. Established on 9 July 2002, the AU was formed as a successor to the Organisation of African Unity...
.
Non-African Member Countries:
| - over 42.71 billion $ since 1991. |
United Nations Development Business
The United NationsUnited Nations
The United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...
launched Development Business
Development Business
Development Business, also known as "United Nations Development Business", "UN Development Business", "UNDB" or "DB" is an online and print publication issued by the United Nations Department of Public Information...
in 1978 with the support of the World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
, and many other major development banks from around the world. Today, Development Business
Development Business
Development Business, also known as "United Nations Development Business", "UN Development Business", "UNDB" or "DB" is an online and print publication issued by the United Nations Department of Public Information...
is the primary publication for all major multilateral development banks including the African Development Bank, United Nations agencies, and several national governments, many of whom have made the publication of their tenders and contracts in Development Business
Development Business
Development Business, also known as "United Nations Development Business", "UN Development Business", "UNDB" or "DB" is an online and print publication issued by the United Nations Department of Public Information...
a mandatory requirement.
See also
- African Economic OutlookAfrican Economic OutlookThe African Economic Outlook is an annual reference book-journal which focuses on the economics of most African countries. It reviews the recent economic situation and predicts the short-term interrelated economic, social, and political evolution of most of African country economies...
is published annually by the OECD Development Centre and the African Development Bank. - Asian Development BankAsian Development BankThe Asian Development Bank is a regional development bank established on 22 August 1966 to facilitate economic development of countries in Asia...
External links
- Bank Information Center
- African Development Bank home page
- African Development Bank page for African Development Fund
- African Development Bank page for Nigeria Trust Fund
- Regional Development Banks: Stepping Out of the Shadows - The African Development Bank
- Past Presidents of the African Development Bank
- Building Africa's Development Bank: Six Recommendations for the AfDB and its Shareholders