AfDB's Role within NEPAD

In November 2001, the Heads of State and Government Implementation Committee (HSGIC) of NEPAD requested the Bank to provide technical assistance and advisory services in support of the implementation of the Initiative. The specific mandate of the Bank with respect to infrastructure development was to develop a plan for infrastructure development.

The Bank Group was also requested to collaborate with the Economic Commission for Africa (ECA) on Economic and Corporate Governance, and to help foster the adoption and implementation of banking and financial standards.

As the process evolved, the Bank’s lead role was expanded to cover corporate governance (including banking and financial standards). The Bank was also designated as a strategic partner to the African Peer Review Mechanism (APRM). The role of the partner institutions was to be mainly that of providing technical assistance and advisory services to the NEPAD structures.

To implement its NEPAD mandate, the Bank put in place the necessary institutional arrangements, including the establishment, in January 2004, of the NEPAD Support Unit within the Bank’s organisational structure. The Unit is under the direct supervision of Vice President, ONVP and is staffed by professional staff in infrastructure and banking and financial standards, in line with the Bank’s mandate, and is headed by a Director. In addition, the Boards of Directors approves yearly administrative budgets of approximately US$1.5 million to fund the Bank’s technical and logistic support to the NEPAD.

The NEPAD Support Unit is responsible for coordinating the Bank’s involvement in the NEPAD process. In this regard, the Unit liaises with other Bank departments and units to provide technical support to the NEPAD and African Peer Review (APR) Secretariats as well as the NEPAD Steering Committee, the APR Panel of Eminent Persons and the Heads of State and Government.

Following earlier years in the design of NEPAD programs and the African Peer Review Mechanism, the year 2004 launched the implementation of the programs. In the continent as a whole, several achievements were recorded, including financing and commencement of implementation of infrastructure projects worth a total of several billion US dollars, launching of a NEPAD project preparation facility, launching of the APRM, accession to the APRM by a growing number of African countries and commencement of self assessments by several countries.

Yet, there have also been challenges related to the implementation of the programs. These include building the requisite capacity for operationalisation of the APRM and for the implementation of the infrastructure programs in the regions, shallow depth of understanding of NEPAD by countries, and low coordination of responses at the continental level. The Unit’s activities have been largely directed at providing the requisite technical support to address the challenges in the NEPAD.
 

Main areas of intervention

Infrastructure
The approach adopted is two pronged: a Short Term Action Plan (STAP) to kick start the process in the short-term, and a Medium–Long Term Strategic Framework (MLTSF) that will define a solid framework for infrastructure development in the continent in the medium to long-term. In addition, the Unit is managing a multi-donors NEPAD Infrastructure Project Preparation Fund (NEPAD-IPPF), which key objective is to assist African countries, Regional Economic Communities (RECs) and infrastructure development institutions to prepare high quality, viable regional infrastructure projects. The Fund aims to bring projects to bankable level, at which they are ready to solicit financing from public and private sources.

Raising Financial Standards
The Bank Group collaborates with the Economic Commission for Africa (ECA) on Economic and Corporate Governance, and on helping foster the adoption and implementation of banking and financial standards.  

African Peer Review
The African Peer Review Mechanism (APRM) is an instrument voluntarily acceded to by member states of the African Union, aimed at ensuring that state policies and practices conform to high political, economic and corporate governance standards. The Bank is one of the strategic partners - along with ECA, UNDP and AU specialized agencies - to assist countries and to work with the APR stakeholders to ensure the independence, technical competence and credibility of the process
 
NEPAD-IPPF Special Fund
Established in 2004, and financed by Canada and Denmark, the NEPAD–IPPF Special Fund’s mandate is to assist African countries and RECs and related institutions to prepare high quality and viable regional/continental infrastructure projects in the energy, water resources management, transport and information and communication sectors, which would be ready to solicit financing from public and private sources. A secondary objective of the NEPAD-IPPF, in relation to the objectives of NEPAD, is to support the creation of an enabling environment of private participation in infrastructure as well as support to targeted capacity building initiatives in infrastructure development to enhance the sustainability of existing and planned infrastructure in the continent.


Highlights of 2007
In 2007, the African Development Bank approved 5 regional infrastructure projects under the NEPAD initiative for a total of US$ 290 million (UA 183.5 million). This brings the total number of NEPAD Short Term Action Plan (STAP) projects financed by the Bank since 2002 to 38, for a total amount of US$ 1.3 billion (UA 0.82 billion); this is in addition to US$ 1.6 billion (UA 1.01 billion) mobilized through cofinanciers.

Under the NEPAD Infrastructure Project Preparation Facility (NEPAD-IPPF), US$ 4.2 million was approved in 2007 to finance 7 (UA 2.66 million) project preparatory activities in the energy, transportation, and ICT sectors. The facility is currently financed by Canada (C$ 10 million/UA 6.4 million) and Denmark (DKK 3 million/UA 0.37 million). The Bank has intensified its resource mobilization efforts resulting in 3 new donors (Norway, the UK, and Germany) who have made pledges to the Fund. The UK has pledged GBP 6 million (UA 7.6 million), Norway NOK 45 million (UA 5.3 million), and Germany € 2 million (UA 1.9 million) to support capacity-building efforts for the RECs in infrastructure projects. In December 2007, a formal agreement was signed between Norway and the Bank.