AFDB Group Records Excellent Performance in 2006
Shanghai, China, 14 May 2007 – The African Development Bank (AfDB) Group achieved excellent operational and financial results in 2006, with overall loans and grants approvals by the Group increasing to US$ 3.9 billion from US$ 3.3 billion in 2005.
Aggregate approvals from the ADB window rose by 20.3% while the African Development Fund (ADF), the concessional window of the Group registered 8.6% increase in approvals in 2006, (excluding approvals for the Highly Indebted Poor Countries Initiative (HIPCS), Vice-President for Finance, Mr. Thierry De Longuemar, said on Monday in Shanghai, China, during a presentation of the Bank Group’s operations ahead of its 16-17 May Annual Meetings.
During the year in review, policy-based lending from the ADB window shot up by 178% while private sector operations rose by 55%. In terms of the major sectors funded by the Bank, finance recorded an increase of 53.0% while infrastructure and multisector operations went up by 23.9% and 7.8% respectively, Mr. De Longuemar said The Fund intervened in 80 operations in 32 countries and 20 multinational projects in 2006, where a total of 2.22 billion Units of Account (UA) were committed under the tenth replenishment of the ADF.
Resources were diversified across regions and sectors, with the North Africa region receiving 32.5% of the allocations followed by West Africa, 23.4%. The East African region came third with 15.2%, Southern Africa followed with 13.1% against 11.8% for Central Africa and 4% for multiregional projects.
On a sectoral basis, agriculture and rural development received the largest share with 17.6 percent, followed by the transport sector with 16.7% and multisector projects with 15.4%. The finance sector got 13.8% of the loans and grants while the social sector got 11.6%, 9.3% for power supply, 7.8% for the water sector, and 2.5% for other sectors.
In addition, the Bank Group approved 34 other projects for UA 11.7 billion during the period, through co-financing with partners.
"Development assistance from the Bank Group was leveraged more than 4.2 times through assistance from donors", Mr. De Longuemar said, adding that enhanced emphasis on multisector operations indicated the importance of public sector management and institutional support.
During the period in review, the Bank Group approved seven private sector operations and one loan guarantee for US$ 418.97 million, almost doubling the amount approved for the sector the previous year. It followed up with the establishment of the Enhanced Private Sector Assistance for Africa Initiative in collaboration with Japan in the belief that the "private sector is the key to economic growth and poverty reduction in Africa".
The Bank Group also made a huge impact in debt reduction under the Multilateral Debt Relief Initiative (MDRI), by mobilizing US$ 8.54 billion for debt relief over a 50-year period with effect from September 2006. Seventeen of the 33 countries eligible for the Highly Indebted Poor Countries (HIPC) Initiative reached completion point at the end of 2006.
Mr. De Longuemar explained that the ongoing Bank-wide reforms would enable the institution to better deliver on its development mandate by channelling resources to operations, building capacity in line with greater decentralization (21 offices established at the end of 2006) and by reinforcing tools for knowledge leadership. The Bank Group is also focussing on infrastructure (water sector initiatives, Infrastructure Consortium for Africa and NEPAD), promoting regional integration and good governance, strengthening the private sector and development of competitiveness as well as increased selectivity, improved client-focus through decentralization as well as the appointment of an independent High Level Panel to advise the Bank on its strategic vision.
The Bank has approved 3,102 projects for US$ 56 billion from 1967 when it began operations to 31st December 2006.