The AFRICAN DEVELOPMENT BANK Group (AFDB) or Banque Africaine de
Developpment (BAD) is a multilateral development finance institution .
The AfDB was founded in 1964 and comprises three entities: The African
Development Bank, the African Development Fund and the
* 1 History
* 2 Group entities
* 2.1 African Development Fund
* 3 Management and control
* 4 Unit of Account
* 5 Functions
* 6 Status
* 7 Recent trends and directions
* 8 Prospects
* 9 African Development
Following the end of the colonial period in Africa, a 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.
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.
AFRICAN DEVELOPMENT FUND
Established in 1972, the African Development Fund started operations
in 1974."The African Development Fund"
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.
NIGERIA TRUST FUND
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
Dr. Akinwumi Ayodeji Adesina is the 8th elected President of the
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.
UNIT OF ACCOUNT
ADB UNIT OF ACCOUNT
The African Development
The primary function of AfDB is making loans and equity investments for the socio-economic advancement of the RMC. Second, the bank provides technical assistance for development projects and programs. Third, it promotes investment of public and private capital for development. Fourth, the bank assists in organizing the development policies of RMCs. The AfDB is also required to give special attention to national and multinational projects which are needed to promote regional integration.
(i) Mobilizing financial resources from the Government or the foreign financial institutions with; (ii) A view to lending the money for development of specific sectors of the economy
The ADB promotes economic development and social progress of its RMCs
in Africa and the bank commits approximately 3 billion dollars
annually to African countries. Its relatively small lending and
tendency to follow in the footsteps of more prominent public
institutions like the
AfDB emphasizes the role of women along with education reforms, and
lent its support to key initiatives such as debt alleviation for
Heavily Indebted Poor Countries
RECENT TRENDS AND DIRECTIONS
One of emerging views, repeatedly cited by the AfDB’s Board of Directors and management, is 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 , 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.
The AfDB has 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 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 it possible.
* Institutional capacity building through assistance of
policy/strategy formulation and implementation
* Human capital development to create an environment for the
operation of national
To date, the bank's contribution in the fight against HIV/
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.
The AfDB's financial standing has been restored from the near collapse of 1995, but its operational credibility remains a work-in-progress. A working group convened by the Center for Global Development , an independent Washington think tank , released 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.
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 banking 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
AFRICAN DEVELOPMENT BANK ANNUAL CONFERENCES
African Development Bank's(AfDB) 4th annual conference outside Africa
is going to be held in
AfDB Beneficiary Countries ADF Beneficiary Countries AfDB and ADF Beneficiary Countries Non-African Member Countries
AFDB BENEFICIARY COUNTRIES:
ADF BENEFICIARY COUNTRIES:
AFDB AND ADF BENEFICIARY COUNTRIES:
NON-AFRICAN MEMBER COUNTRIES:
LIST OF 20 LARGEST COUNTRIES BY VOTING POWERS
The following table are amounts for 20 largest countries by voting
powers at the African Development
The 20 Largest Countries by Voting Powers at the African Development
UNITED NATIONS DEVELOPMENT BUSINESS
African Economic Outlook is published annually by the OECD
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