AfDB Will Need a Capital Increase by 2011 to Address the Financial Crisis and its Development Mandate, says AfDB President
Dar es Salaam, 12 March-The African Development Bank (AfDB) is to significantly increase its annual lending to US$11 billion to help countries address the current financial and economic crisis, the institution’s president, Donald Kaberuka, said on the margins of an International Monetary Fund conference on creating successful partnerships for Africa’s economic growth.
Mr. Kaberuka told the media at the two-day conference on the theme: “Changes: Creating Successful Partnerships for Africa’s Growth” held in Dar es Salaam, Tanzania, from 10-11 March that the AfDB had unveiled an Emergency Liquidity Facility of US$ 1.5 billion, a Trade Finance Initiative of US$ 1 billion, and a Framework for Accelerated Resource Transfer of African Development Fund (ADF) Resources to help member states cope with the current financial and economic crisis.
He said it was important that international development finance institutions be provided with additional resources to enable them support member states during the current crisis, adding that “The Bank currently has enough risk capital to deliver on its normal lending programme consistent with its medium-term strategy.”
“We currently estimate that this lending program will consume about 90 percent of its risk capital by 2012. However, the new demand created by the crisis to which the Bank is responding, implies that the Bank’s risk capital will need to be boosted by the end of 2011,” he said.
The conference addressed key policy questions, with the common goal of forging renewed African partnerships for growth in Africa in the 21st Century. Key questions addressed included:
- What do Africa’s successes tell us about the main bottlenecks and risks to sustained growth and poverty reduction? How best can countries tap into the potential of the private sector and the financial sector to advance these goals?
- How can countries reduce the risks posed by exogenous shocks and a turbulent global economy and avoid the "resource curse"?
- How does the model for financing development need to adapt? What should be the direction of Africa's already evolving partnerships, including its partnership with the IMF?
The two-day conference, hosted by the IMF Managing Director, Dominique Strauss-Kahn, was opened by the Tanzanian President, Jakaya Kikwete. Delegates to the conference included former United Nations Secretary-General, Kofi Annan.