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Diversifying the Bank’s Products to Provide Eligible ADF-Only Countries Access to the ADB Sovereign Window

19-May-2014

Since the 1998 review of the Bank Group’s Credit Policy, the macroeconomic performance of most low-income African countries has improved significantly. In particular, many African economies are now characterized by high economic growth, a stable macroeconomic environment and low or moderate risk of debt distress. This turnaround is the result of improved policies, a decade of impressive economic growth, reforms in public financial and debt management and the HIPC/MDRI initiatives. However, Africa needs to invest substantial resources in order to accelerate and sustain high rates of growth and transform the structure of its economies to generate much needed employment. These investments cannot be met by scarce concessional resources. As a result, several countries in Africa have started borrowing significant amounts of money on commercial terms during the past 5-6 years, at rates significantly higher than what the Bank could provide. The Bank Group’s 2013-22 Strategy calls for additional financing and innovative instruments tailored to meet the needs of low-income African countries

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