Written by The African Development Bank (AfDB) is a regional financial institution established in 1964.
The Bank was created with the purpose of providing development assistance to African countries.
It was established to promote economic growth, development and social progress across the African continent.
The African development bank(AFDB) provides finances to African governments and private companies investing in it.
The AFDB currently has 81 countries as its members. As of 31st of December 2016, It has 1500 staff.
The African development bank’s mission is to fight poverty and improve living conditions on the continent by promoting the investment of public and private capital project programs that are likely to contribute to the economic and social development of the region.
History of the African Development Bank
African development bank was founded on the 10th of September 1964 by the organisation of African unity which is the predecessor of the African Union.
After the colonial era, unity was vital in the continent which led to the formation of an organisation of African unity which was later replaced by the African Union, and a regional development bank.
After several meetings with top African officials and ministers of finance, a conference was reconvened by the United Nations Economic Commission For Africa (UNECA) in Khartoum, Sudan from the 31st of July to the 4th of August.
The agreement was signed by 23 African governments on the 4th of August and came to force on the 10th of September 1964.
The inaugural meeting of the board of governors was held from the 4th of November to the 7th of November 1964 in Lagos, Nigeria.
The African Development Bank opened its headquarters in Abidjan, Ivory Coast in March 1965, but it commenced operation on 1st, July 1966.
From February 2003 to September 2014, the bank operated from its temporary relocation agency in Tunis, Tunisia due to the Ivorian civil war.
Entities of the African Development Bank
The African development bank has three entities namely; The African development bank, the African development fund and the Nigeria trust fund.
African Development Fund
The African development fund is a concessional lending window of the AfDB that was established in 1972 by the African Development Bank and 13 non-African countries.
It was established with the responsibility of providing development finance on concessional terms to low-income members who are unable to borrow under the non-concessional terms of the African development bank.
The ADF provides grants and low-interest loans to low-income African countries that are not able to access financing from the AfDB’s regular lending window.
The main goal of the African Development Fund is to contribute to poverty reduction, and the economic and social development of the least developed African countries by providing concessional funding for projects and programs, as well as technical assistance for studies and capacity-building activities.
The ADF is primarily funded by donor countries, which include both African and non-African countries.
It currently has 32 contributing countries and 37 countries that benefit from it.
The largest shareholder of the African Development Fund is the United Kingdom with approximately 14% of its total working shares followed by the USA, with approximately 6.5% of the total voting shares
Nigeria Trust Fund
The Nigeria Trust Fund was established in 1976 by the Nigerian government through an agreement between the African Development Bank Group and the Federal Government of Nigeria.
It was established as a self-sustaining revolving fund with an initial capital of $80 million, which was replenished with $71 million in 1981.
The NTF is a separate entity from the AfDB and the ADF, but it is managed by the AfDB’s Board of Directors.
It is aimed at assisting in the development efforts of the poorest AFDB members.
The Nigeria trust fund uses its resources to provide financing for projects of national or regional importance which enhances the economic and social development of the low-income members.
Unlike African Development Funds(ADF) resources, which are allocated to countries, the Nigeria Trust Fund(NTF) resources are allocated to projects of National or regional Concern, not to countries
African Development Bank
The African Development Bank is the primary entity of the AfDB and was established in 1964.
It is a multilateral development bank that provides financing for a wide range of development projects across the African continent.
The activities of the African Development Bank are focused on promoting economic and social development in Africa, with an emphasis on sustainable growth, poverty reduction, and regional integration.
Functions of the African Development
1. Making loan and equity investments in Regional Member Countries (RMCs): The lending operations of the African Development Bank (AFDB) are aimed at financing projects and programs that contribute to the economic and social development of RMCs.
The bank provides loans for financing specific projects, or specific sectors of the economy, such as agriculture or education.
Apart from providing loans, the African Development Bank also has equity investments in RMCs, which are used to provide capital to private sector companies operating in Regional Member Countries.
2. Provision of technical assistance for development projects and programs: The African Development Bank also provide advice, training, and capacity-building support to Regional member countries to help them design, implement, and manage their development projects and programs effectively.
The purpose of providing technical assistance is to help improve the effectiveness and sustainability of development projects and projects of RMCs.
3. Promoting investment of public and private capital for development: This is yet another important function of the African Development Bank.
The AFDB works with governments to secure financing for development projects from other multilateral organizations and donor countries.
It also mobilizes private capital by providing guarantees, equity investments, and other financial instruments to encourage private sector investment in RMCs.
4. Organization of the development policies of Regional Member Countries: The bank works with RMCs to help them develop and implement policies aimed at promoting sustainable economic growth and poverty reduction.
By doing this, the bank aimed at improving the quality and effectiveness of development policies and strategies in RMCs
