2010 Annual Report-Support for Fragile States
The Bank continued its support throughout 2010 to help economic recovery in Africa’s fragile states through its Fragile States Facility (FSF).
The FSF helps these countries in three ways:
- With supplemental investment support in the Bank’s key priority areas of operation
- Through arrears clearance
- With targeted support for capacity building and technical assistance
Through the FSF, the total African Development Fund (ADF) allocation to fragile states has risen over and above each country’s allocation under the performance-based allocation (PBA) system.
At the final negotiations for the ADF-12 replenishment in September 2010, it was agreed to transfer UA 764 million (approximately US$ 1.4 billion) for the ADF-12 period of 2011-13.
In addition, in October 2010, the Bank started the Zimbabwe Multidonor Trust Fund (the Zim-Fund). By the end of 2010, donors had paid into the fund an estimated UA 24.5 million (US$ 37.8 million).
During 2010, six countries received a total of Units of Account 110.7 million (US$ 170.5 million) for budget support, economic governance reforms and infrastructure rehabilitation.
It is not yet possible to fully quantify the results from all these commitments, partly because they are at different stages of implementation.
However, early indicators show improvements in both Country Policy and Institutional Assessment (CPIA) and in portfolio performance indicators. Those indicators include disbursement ratios and the number of operations under supervision.
To build on these improvements and the operational challenges presented by fragile states, the Bank is strengthening its results measurement tools, improving portfolio management and intensifying its engagement at country level.
The FSF rapid-response instrument complements other Bank support in fragile states. Since it was set up in March 2008, this simple, fast and flexible mechanism has been yielding results.
For example, the arrears clearance process has allowed countries under arrears-induced sanctions, such as Togo, to re-engage quickly with the international community.
The process has also helped such countries get additional investment resources for areas such as infrastructure, agriculture and the social sector.
The budget support process has also helped the rehabilitation of infrastructure and social services, notably water and sanitation. This will result in more access to safe water in countries such as Comoros, Liberia and Zimbabwe.
Several fragile states have benefitted from institutional capacity strengthening in areas such as public financial management, statistical capacity building and private sector development. For example, the Bank’s support in Somalia has resulted in a national budget framework and budget accounts for the first time in 20 years. This system has improved financial transparency and accountability in Somalia.