The African Development Bank Group established the Fragile States Facility (FSF) and its implementation arm, the Fragile States Unit, respectively in March 2008 and July 2008 with the objective to effectively assist eligible fragile states to consolidate peace, stabilize economies and lay foundations for sustainable poverty-reduction and long-term economic growth.

The Fragile States Facility was designed to provide support to eligible regional member countries via three pillars: the Supplemental Support window for funding infrastructure, state capacity building and accountability (Pillar I), the Arrears Clearance window (Pillar II) and the Technical Assistance and capacity building window (Pillar III).  

In July 2008, the Bank created the Fragile States Unit (OSFU) to operationalize the Bank’s Strategy for Enhanced Engagement in Fragile States.  The main objective of the unit is to facilitate the Bank’s work in fragile states. It provides advisory support to the Bank’s regional and sector departments working in fragile states, implements the technical assistance and capacity building programs, and helps to implement the arrears clearance program.

Despite its relatively new creation, the FSF has made tangible achievements under all its three pillars.  Since its inception, it has channeled supplemental financial resources to nine (9) fragile states under pillar I, cleared the arrears of two regional member states (Pillar II) and provided targeted technical assistance and institutional capacity building operations to sixteen (16) eligible fragile states under pillar III.

Social infrastructure and economic reforms

The Supplementary resources have:

• Supported the implementation of poverty reduction support programs and the development of credible governance reforms and country financial management systems,
• Rehabilitated and reconstructed basic infrastructure, including energy and water supply and sanitation, and
• Revived the productive sectors of war-ravaged communities.

For example, the FSF is currently financing the following projects:

• The Lungi-Port Loko Road Upgrading project in Sierra Leone (Units of Accounts-UA 26.026 million)
• Poverty Reduction Programs in Liberia (UA 9 million)
• Economic Governance Reforms in Burundi (UA 12 million), Togo (UA 10 million) and Comoros (UA 2 million)
• Community Development Project in Central African Republic (UA 8 million)
• Health Project in Guinea Bissau (UA 6 million)
• Electricity Infrastructure Rehabilitation and Extension Project in the Democratic Republic of Congo (UA 60 million)

In total, UA 253.73 million have been committed or disbursed under pillar I
                                                                                                                                                                                                       
Arrears clearance and debt sustainability

The arrears clearance window has helped Côte d’Ivoire and Togo clear their arrears for the amount of UA 255.58 million: (UA 241.01 million for Côte d’Ivoire and UA 14.57 million for Togo). These operations also enabled them to engage in the process of debt relief under the Heavily Indebted Poor Countries Initiative (HIPC) and the Multilateral Debt Relief Initiative (MDRI). UA 0.07 million were also used to settle some outstanding balances in Liberia’s arrears clearance program.

Technical assistance and capacity building

The Fragile States Facility also provided targeted technical assistance and institutional capacity building to sixteen (16) fragile states, amounting to UA 39.36 million.  The operations aimed at strengthening the beneficiaries’ human and institutional capacity in public administration, economic and financial management, support service delivery, particularly water supply and sanitation and the productive sectors, including the management of natural resources.  

In 2009 the resource envelope of the FSF amounted to UA 647.80 million from UA 511.4 million in 2008, out of which UA 346.35 million were disbursed.

Promotion of partnership activities

The majority of FSF operations are closely coordinated with other donors’ interventions, including the World Bank, the International Monetary Fund (IMF), the United Nations Development Programme (UNDP) and other bilateral aid agencies. Furthermore, OSFU proactively contributes to the promotion of dialogue between donors and partner countries on issues of fragility and conflict.

The objectives of the dialogue are to provide a platform to share country-level peacebuilding and statebuilding experiences, and agree on good practices of delivering development assistance to fragile states. The Fragile States Unit participated in the Steering Group meeting of the International Dialogue on Peacebuilding and Statebuilding that was held in Dili, Timor Leste, in October 2009. Thus far, forty (40) donor governments, partner countries and international organizations have joined the International Dialogue on Peacebuilding and Statebuilding.

OSFU is a member of the Organisation for Economic Cooperation and Development-Development Assistance Committee (OECD-DAC) International Network on Conflict and Fragility (INCAF).  Since the Accra High Level Forum in September 2008, the work of INCAF has been broadened to include work-streams examining a range of aid and development effectiveness issues in fragile and conflict-affected countries.