The African Development Fund (ADF) is the concessional window of the African Development Bank (AfDB) Group. Established in 1972, it became operational in 1974. Administered by the African Development Bank, it comprises, to date, 29 contributing countries and benefits 38 countries. The 38 ADF-eligible countries include those that are increasing their economic capacities and heading toward becoming the new emerging markets—as well as those that remain fragile and need special assistance for basic levels of service delivery. The ADF has the challenge of having nearly half its client countries as fragile states, and facing a situation where even stable economies can become fragile due to a single internal or external shock.
The ADF contributes to poverty reduction and economic and social development in the least developed African countries by providing concessional funding for projects and programs, as well as technical assistance for studies and capacity-building activities. The Fund has cumulatively invested UA 29.4 billion (USD 45 billion) over its 40 years of operationalization on the African continent.
The Fund’s resources are replenished every three years by its donor countries. In the replenishment discussions, the donor countries are represented by their ADF Deputies.
Agreement establishing the African Development Fund
The Agreement establishing the African Development Fund designates the Board of Governors as the Fund’s highest policy-making organ. The Board of Governors meets at least once a year. The ADF Board of Directors includes seven Executive Directors representing donor countries (the Executive Directors are nominated by their constituencies) and seven Executive Directors representing the AfDB. The Board oversees the Fund’s general operations.
The African Development Fund emerged as the solution to two major constraints which became apparent after the African Development Bank had commenced operations in 1974 i) the limited amount of resources which the Bank could provide and ii) the nature as well as the terms of the loans, which were not fully appropriate for the poorest of its member countries, especially for projects with long-term durations or non-financial returns.
The Fund’s resources consist of contributions from internal Bank resources and periodic replenishments by donor countries, usually on a three-year basis. Initial contributions to ADF were pledged in 1972. The first replenishment – designated ADF I – took place in 1974 and covered the period 1976-1978. In total, the ADF has been replenished thirteen times; therefore, the current ADF period is ADF-13. Consultations on the thirteenth replenishment successfully concluded in September 2013 for the Fund’s activities in 2014-2016. For the ADF-13 period, ADF Deputies agreed on a replenishment level, excluding technical gap, of UA 4.86 billion, an amount equivalent to US $7.3 billion. Once the thirteenth replenishment has been approved by the Board of Governors, it will become effective in 2014.