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Development Research Briefs - Accounting for Vulnerability of African Countries in Performance Based Aid Allocation
Like other Multilateral Development Banks, the African Development Bank (AfDB) Group allocates some of its aid through a performance-based allocation (PBA) formula which is primarily based on the quality of economic policies and governance in each beneficiary country. Governance plays a major role in the PBA formula and its weight is equal to more than double that of economic policy1. During times when many regional member countries of the Bank are facing severe liquidity problems because of the current economic and financial crisis, it is useful to consider whether the PBA penalizes countries which are most in need of resources.