Fragile States Facility
The case for an enhanced approach to fragile states, allowing an increased and more differentiated engagement, has become clear. As a development institution, the Bank has to stay engaged in all its member countries and in particular in countries coming out of conflict and crisis. The latter is especially important given the marked progress that has been made in recent years in resolving many long running and debilitating conflicts, and bringing prolonged political crises to an end. The possibility of successful turnaround is clearly demonstrated by the experience of such countries as Mozambique and Rwanda, where strong country commitment combined with enhanced and more predictable support from development partners sustained and accelerated the transition out of fragility. Building on the lessons of the past in order to craft more effective engagement in these countries for the future is thus particularly urgent for the African Development Bank.
To this end, the African Development Bank has devised a strategy for enhancing its engagement in fragile states and situations. The objectives of this strategy are to more effectively assist fragile states to transit out of fragility. Specifically, the Bank’s enhanced engagement will strengthen capacity and accountability in economic and financial governance, including the management of natural resources. Underpinning the strategy is a move to strengthen incentives for countries to pursue good economic management, thus facilitating their transition out of fragility. The Bank’s enhanced support to fragile states and situations will be implemented through the proposed Fragile States Facility (FSF).
The Fragile State Facility provides a broad and well integrated operational framework through which the Bank can be more effectively engaged in countries experiencing fragility. Specifically, the FSF will provide scaled-up support to eligible fragile states, under 3 pillars:
Pillar I
Supplementary Financing: On top of the regular PBA-based country allocation, supplementary financing will be provided to eligible post crisis/transitional countries. The support will be for a limited period of time, with clear and strict criteria to be met for eligibility, a specific allocation, and phasing-out mechanism and monitoring, delivery and exit provisions.
Pillar II
Arrears Clearance: Supplementary support will be closely coordinated with arrears clearance operations to ensure the highest impact to the eligible post crisis/transitional countries. Accordingly, the Bank’s Post-Conflict Country Facility (PCCF), which provided arrears clearance to eligible countries, will be folded into an Arrears Clearance Window (ACW) of the FSF
Pillar III
Targeted Support: A limited pool of resources will be set aside to allow the Bank to provide supplementary targeted support for capacity building and knowledge management, etc. in all categories of fragile states. This Pillar focuses on human and institutional capacity building and is implemented through secondment or use of non-sovereigns to provide services such as procurement, auditing, training or even social services.
Financing the FSF: The resources allocated to the FSF under the ADF-XI cycle, 2008-2010, is UA 408.43 million, approximately $US600 or 7.5 per cent of the total ADF-XI resources available for allocation (i.e. the total replenishment level minus contingencies). Funding of the FSF can be supplemented by additional voluntary contributions from donors.