G-20 Recognizes Critical Role Played by MDBs
The G-20 Summit in Toronto took place at a time when the world is faced with uncertainty about the fate of the economy.
However, the G-20 leaders clearly recognized the key role multilateral development institutions have to play during this difficult period and the need to provide additional support.
Article 26 of the G-20 Toronto Summit Declaration specifically states: “We will fulfill our commitment to ensure an ambitious replenishment for the concessional lending facilities of the MDBs, especially the International Development Association and the African Development Fund”.
This 12th replenishment of the African Development Fund (ADF) comes at a critical time for the African continent. With only five years remaining before the 2015 Millennium Development Goals (MDGs) deadline, Africa stands out as the continent with the biggest development financing gaps.
The 2008-2009 global economic and financial crises have further challenged ADF countries, particularly fragile states, and jeopardized the gains Africa has made over the past several years. Considerable resources have to be mobilized to restore economic growth to pre-crisis levels, bridge infrastructure gaps, pursue regional integration, invest in climate change adaptation and mitigation, and achieve the MDGs.
Under ADF-11, the Fund has responded expeditiously to the needs of its clients, and has achieved unprecedented levels of commitments, particularly in its core strategic priority areas of infrastructure, governance, support for fragile states and regional integration. Both commitments and disbursements have doubled compared to ADF-10, demonstrating the ADF’s capacity, flexibility and commitment to Africa’s development.
Under ADF-12, the Fund is committed to maintaining this track record of success even while it continues to build its capacity to deliver and measure development impacts in ADF client countries. It will continue to contribute to development results on the ground.
The African Development Bank (AfDB)’s President, Donald Kaberuka, has reiterated the institution’s commitment to put in place a robust Results Management Framework. “AfDB now has such a framework that systematically attempts to measure the results of our operations on the ground. It is generating early strong, growing evidence that ADF operations exiting the portfolio are contributing significantly to development outcomes, such as the 17 million persons who have been connected to the electricity networks and 2 million persons who were able to access clean water,” he said.
The ADF is the Bank Group’s concessional window. It promotes economic and social development in 38 low-income African countries through provision of concessional loans and grants (including to the private sector) to finance projects and programmes, as well as technical assistance for studies and capacity-building activities.
Its main objective is to reduce poverty in Africa. As the Bank Group invests in new projects and initiatives on the continent, the resources provided to the ADF are periodically augmented.
The ADF is replenished every three years by 26 donor countries. The 11th replenishment of the ADF its 2008-2010 operations, was concluded in December 2007 at a record level of USD 8.9 billion.