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Working Paper 103 - Accounting for Vulnerability of African Countries in Performance Based Aid Allocation
The African Development Bank Group (AfDB) allocates its development aid among its beneficiary countries through its soft loan window, the African Development Fund (ADF), using a procedure which focuses mainly on the quality of their economic policy and governance. Forty of the fifty-three AfDB Regional Member countries (RMCs) are eligible for ADF financing. These include two so-called blend countries (Nigeria and Zimbabwe), which also have access to the non-concessional window. This AfDB procedure is similar to that of other multilateral development banks. The precedence given to the governance criterion has been criticized in academic circles as well as the donor community. The main critique addressed to the current aid allocation formula is that it does not sufficiently take into account the characteristics of low-income countries, especially low-income African countries.