The African International Bank (AfDB) stands as a vital institution in the landscape of African development finance. Celebrating its 60th anniversary recently, the Bank has transformed from its humble beginnings into Africa’s leading development finance institution.
African Development Bank Headquarters
Establishment and Early Years
The seeds of the African Development Bank were sown in Khartoum, Sudan, in September 1964, with a meeting of African leaders who ratified the multinational agreement establishing the bank. This agreement was a culmination of efforts, including the Tubman-Nkrumah-Touré conference of 1958 and the Monrovia Conference of 1961. The agreement establishing the African Development Bank (AfDB) was co-signed by 23 African governments on August 4, 1963, during a conference convened by the United Nations Economic Commission for Africa (UNECA) in Khartoum, Sudan, from July 31 to August 4.
The inaugural meeting of the Board of Governors of the bank was held from 4 to 7 November 1964 in Lagos, Nigeria. Originally, only African countries were able to join the bank, but in 1982, it began allowing the entry of non-African countries as well. At the time, it comprised 79 countries. Celebrating its 60th anniversary last year, the Bank embodies the transformation of the continent. From its beginnings with 23 member countries and a small operational team, it has grown to become Africa’s leading development finance institution, with 81 shareholder countries and more than 2000 staff.
AfDB Annual Meeting
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Relocation and Return to Abidjan
Due to political turmoil in Côte d'Ivoire, the Bank operated from its temporary Relocation Agency in Tunis, Tunisia, from February 2003 to the end of 2013. The bank is currently based in Abidjan, Ivory Coast. The Bank returned to its Abidjan headquarters in 2015.
Financial Structure and Operations
The African Development Bank uses a Unit of Account which is registered as ISO 4217, whose standard currency code is XUA. 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% of the vote.
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. 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.
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. The AfDB promotes economic development and social progress of its RMCs in Africa and the bank commits approximately $3 billion annually to African countries.
Since its founding, 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. In five decades, it has financed more than 4,100 operations for a continent that passed the one billion mark in 2010.
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The Bank’s project approval amounts reached UA 6.16 billion, which is close to the pre-COVID-19 pandemic benchmark of UA 7.3 billion from 2019. The High 5 strategic priority areas saw robust increases in funding, with renewable energy projects receiving notable emphasis as they accounted for 100% of the approvals for energy generation projects. Investment in other key areas also increased, with food security receiving UA 1.34 billion, industrialization UA 1.59 billion, and infrastructure UA 1.13 billion.
The Bank's active portfolio grew to UA 44.33 billion, with 58% of projects rated satisfactorily. The infrastructure sector, including power supply, water and sanitation, transport and communications, has traditionally received the largest share of AfDB lending. In 2005, the AfDB approved 23 infrastructure projects for approximately $982 million, which totaled 40% of AfDB approvals that year.
Африканский банк развития показал, что сделано в Гане
Key Initiatives and Funds
The African Development Fund (ADF), established in 1972 and operational since 1974, provides development finance on concessional terms to low-income Regional Member Countries (RMCs) unable to borrow on non-concessional terms. Poverty reduction is the main aim of ADF activities. 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 total donations, at the end of 1996, amounted to $12.58 billion.
The Nigeria Trust Fund (NTF) was established in 1976 by the Nigerian government with an initial capital of $80 million. 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.
The 16th replenishment of the African Development Fund (ADF-16), which provides soft loans and grants, served as a significant financial enhancement, gathering US$8.9 billion. Within this sum, US$429 million was designated specifically for climate change-related initiatives.
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Huge resources have also been mobilised through the Africa Investment Forum (AIF). As it celebrates its 60th birthday, the Bank can look back on millions of lives transformed. From its first financing operations in the 1970s to today’s megaprojects, more than 6500 projects have been implemented across Africa.
African Development Bank Group
Table: Key Financial Data of AfDB
| Indicator | Value |
|---|---|
| Total Operations Financed | 2,885 |
| Total Financing Amount | $47.5 billion |
| Capital (2003) | $32.043 billion |
| ADF-16 Replenishment | US$8.9 billion |
| Climate Change Initiatives (ADF-16) | US$429 million |
Focus on Sustainable Development
The African Development Bank is increasingly focusing on sustainable development and green initiatives. The sustainability bond will help Egypt advance towards this target by increasing access to finance to businesses and projects that help reduce greenhouse gas emissions or otherwise protect the environment. This bond is more than just a financial instrument; It is a strategic extension of our core business model, designed to seamlessly integrate sustainability into our business strategy. We believe that responsible growth is crucial to create a sustainable future for generations to come.
In the African Development Bank's (AfDB) 2022 Annual Report, a decrease in Africa's GDP growth to 3.8%, down from 4.8% the previous year, was recorded.
Morocco was one of the first African countries to benefit from the Bank’s support, with initial financing granted in 1978 for a drinking water and sanitation project. In recent years this support has been reflected in major projects that include the Noor Ouarzazate solar complex, one of the largest in the world, and the Nador West Med port, a strategic hub for regional maritime trade. The Bank has also played a key role in modernising transport and energy infrastructure, helping to strengthen Morocco’s competitiveness on the African and international stage.
