Our Strategic Priorities

The Bank’s Private Sector Operations strategy is one element of a broader array of interrelated institutional priorities including infrastructure development, regional integration, good governance, knowledge management, partnerships and harmonization. The Private Sector Operations strategy articulates four focal priorities: (i) supporting private enterprises, (ii) building competitive infrastructure, (iii) promoting regional integration and trade, and (iv) improving the investment climate.

Supporting Private Enterprises

The Bank strives to support private enterprises across the full business spectrum from micro-enterprises to mega-enterprises and across the broadest range of countries from middle income to low income. Given the diversity and huge numbers of micro, small and medium-scale enterprises (MSMEs), the Bank generally channels its support to these businesses through financial intermediaries, using lines of credit or guarantee facilities combined with grant resources for technical assistance and capacity building. The Bank also supports MSMEs by assisting business associations and other business development services. For the larger-scale enterprises, the AfDB is usually able to provide direct financial support in partnership with other financial institutions.

Building Competitive Infrastructure

The participation of the private sector in infrastructure through public-private partnerships (PPPs) has opened up wide opportunities for improving the supply and quality of basic services in areas such as power, transportation, telecommunications, and water. This not only improves daily living conditions for the general population but also builds a more attractive business environment for foreign and domestic corporations and sponsors. The Bank is uniquely positioned to address the infrastructure needs of regional member countries by combining resources from both public and private windows (including concessional resources) as well as providing technical assistance and capacity building in support of PPPs. The Bank encourages projects in the extractive sector that also enhance public goods in infrastructure, such as power and transportation. A new generation of PPPs based on a model successfully developed by the UK’s Public Financing Initiative (PFI) also opens up new opportunities for private financing in social infrastructure service sectors such as health and education.

Promoting Regional Integration and Trade

To assist African countries to become more competitive in the global marketplace, the Bank advocates trade liberalization policies, finances programs to support inter- and intra-regional trade, helps local banks to establish relationships with foreign banks, and strengthens the financial capacity of local trade financing institutions. Trade promotion is one of the primary ways the Bank can support the development of indigenous private sector companies and the African agricultural sector. Through the private sector, the Bank seeks to reinforce regional integration by promoting the creation of regional development corridors. Private sector operations in the extractive industries can act as the wealth-creating springboard for the expansion of regional development corridors: these can lead to the development of public infrastructure, the creation of upstream local supply-chain businesses, the creation of downstream value-adding industries, and the longer-term diversification of Africa’s largely resource-based economies.

Improving the Investment Climate

The Bank aims to improve the investment climate and so catalyze domestic and foreign companies to support economic and social development. It does this by assisting governments to reform their legal and regulatory frameworks; to strengthen economic and corporate governance; to promote fiscal responsibility, transparency and accountability; to consolidate property rights; to mitigate risks for domestic and foreign investors; to support commercial law reform; and to improve security for goods and transactions. The Bank works with existing development partners such as the World Bank Group to gain scale by applying lessons learned across countries and regions. The Bank also supports the creation of new organizations that focus on improving the enabling environment, such as the Investment Climate Facility for Africa (ICF), an independent trust endorsed by NEPAD, which seeks to mobilize resources to support Africa’s development and to remove barriers to growth.

Did you know

In 2016, total Bank approvals for private sector operations amounted to UA 1.93 billion, 24 percent higher than in 2015. The interventions in 2016 — co-financing, syndication, and strategic partnerships—have strengthened its capacity to leverage and crowd-in third-party investors. They also lifted the ratio of private co-financing to Bank financing to 6:1, against the target of 5:1.