AfDB in brief.pdf

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f Df r i c a n D e v e l o p m e n t B a n k G r o u p

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fDBin Brief

African Development Bank


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Table of Content

1. Presentation of the Bank Group (AfDB) Group

2. Bank Group historical overview, objectives,

membership and resources

3. Bank Group institutional & management structures

4. Bank Group operations, policies, terms, initiatives

and achievements

Annexes

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AfDB in Brief

Introduction

The African Development Bank (AfDB) Group is a regional

multilateral development finance institution, comprising three

distinct entities under one management: the African

Development Bank (AfDB), the parent institution, and two affi-

liates, the African Development Fund (ADF) and the Nigerian

Trust Fund, (NTF). The AfDB Group is Africas premier deve-

lopment finance institution. It is one of the five major global

multilateral development banks (MDBs). It is difficult to cover

all the activities and operations of an institution like the AfDB

in a single document. AfDB in Brief only presents the salient

points of the Bank Groups activities under three different sub-

headings and annexes:


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I. Bank Group historical overview, objectives,

membership and resources

A. Historical overview

AfDB: The African Development Bank was created on 4 August

1963 in Khartoum, Sudan, where 23 newly independent African

countries signed the Agreement establishing the institution. On

10 September 1964, the Agreement came into force when 20

member countries subscribed to 65% of the Banks capital

stock which then stood at US$ 250 million. The inaugural mee-

ting of the Board of Governors (mostly finance ministers) was

held from 4-7 November 1964 in Lagos, Nigeria. The Banks

headquarters was opened in Abidjan, Cte DIvoire, in March

1965. It commenced operations in July 1966 with ten staff

members. When the Bank was established, only independent

African countries were eligible to be shareholders. Thus, for 19

years up to 30 December 1982, the institution depended on

African countries for its capital resources.

ADF: The Agreement establishing the African Development

Fund was signed on 29 November 1972, by the African

Development Bank and 13 non-regional countries, referred to asState Participants. The Fund emerged as the solution to two

major constraints which became apparent after the Bank com-

menced operation: limited resources which the Bank could pro-

vide and the nature as well as terms of loans to the poorest of

the countries, especially for projects with long-term maturities or

non-financial returns such as roads, education and health.

NTF:The Nigeria Trust Fund was set up in 1976 by agreement

signed between the Government of the Federal Republic of

Nigeria and the Bank Group. The NTF became operational in

April 1976 following approval of the agreement establishing it by

the Board of Governors.

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B. Objectives

The overall objective of the AfDB Group is to support the eco-

nomic development and social progress of African countries

individually and collectively, by promoting investment of public

and private capital in projects and programs designed to redu-

ce poverty and improve living conditions. Combating poverty is

at the heart of the Banks efforts to assist the continent to attain

sustainable economic growth. The Bank Group therefore strives

to mobilize internal and external resources to promote invest-

ment and provide technical assistance to the Regional Member

Countries (RMCs). Additional resources are usually mobilized

through co-financing with bilateral and other multilateral deve-

lopment agencies as well as from the financial markets. The

Group also promotes international dialogue on development

issues concerning Africa. It supports policy reforms, capacity

building, knowledge sharing, studies and preparation of deve-

lopment projects.

Since 2006, the Bank Group places greater emphasis on the fol-

lowing strategic areas: Investing in infrastructure; deepening pri-

vate sector investment, supporting economic and governance

reforms; promoting higher education, technology and vocationaltraining; promoting regional integration. Through these core

investment areas the Bank Group provides support to fragile

states, low income countries, middle-income countries, agricul-

ture and rural development, social and human development,

environment and climate change, and gender issues.

C. Membership

At the end of December 2011, the Bank had 77 member coun-

tries, comprising 53 African or regional member countries

(RMCs) and 24 non-African or non-regional member countries

(NRMCs).

Initially, only independent African countries could become mem-

bers of the Bank. Due to growing demand for investments from

African countries and the Banks limited financial resources,

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membership was later opened to non-regional countries. The

admission of non-regional members in December 1982, provi-

ded the AfDB additional resources that enabled it to contribute

to the economic and social development of its RMCs through

low-interest loans. With a larger membership, the institution was

endowed with greater expertise, the credibility of its partners and

access to markets in its non-regional member countries. The

AfDB enjoys AAA ratings from the main international rating agen-

cies. The Bank however maintains its African character by virtue

of its geographical location and ownership structure. It is head-

quartered in Africa, its investment operations are exclusively in

Africa and its President is always an African.

African/Regional member countries

Algeria, Angola, Benin, Botswana, Burkina-Faso, Burundi,

Cameroon, Cape-Verde, Central African Republic, Chad,

Comoros, Congo, Democratic Republic of Congo, Cte dIvoire,

Djibouti, Egypt, Eritrea, Equatorial Guinea, Ethiopia, Gabon, The

Gambia, Ghana, Guinea, Guinea-Bissau, Kenya, Lesotho,

Liberia, Libya, Madagascar, Malawi, Mali, Mauritania, Mauritius,

Morocco, Mozambique, Namibia, Niger, Nigeria, Rwanda, Sao

Tome and Principe, Senegal, Seychelles, Sierra Leone, Somalia,South Africa, Sudan, Swaziland, Tanzania, Togo, Tunisia,

Uganda, Zambia and Zimbabwe.

Non-African/Non-regional member countries

Argentina, Austria, Belgium, Brazil, Canada, China, Denmark,Finland, France, Germany, India, Italy, Japan, Korea, Kuwait,

Netherlands, Norway, Portugal, Saudi Arabia, Spain, Sweden,

Switzerland, United Kingdom and United States of America.

To become an AfDB member, non-regional States must first

accede to ADF membership. Only one ADF member state, the

United Arab Emirates, is yet to accede to AfDB membership. At

the end of December 2011, the ADF comprised the AfDB and

all the 24 non-regional member of the AfDB plus the United Arab

Emirates, bringing the number to 25. South Africa is also a State

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Participant in ADF. Turkey whose membership was approved by

the Board of Governors in Maputo, Mozambique, in May 2008

is in the process of completing the requirements of state partici-

pation in the ADF.

AfDB non-regional members, or ADF State Participants, include

not only most of the developed industrial economies, notably 17

OECD countries, but also a number of OPEC countries as well

as some middle income South American and Asian countries

on the whole 14 countries from Europe, 4 from North and South

America, 4 from Asia and 3 from the Middle East. .

D. Resources

The sources of Bank Group resources vary according to the

three institutions as the conditions and uses of the funds also

vary. AfDB resources are made up of ordinary and special funds.

The ordinary resources include:

i. Capital subscriptions by member countries,

ii. Incomes generated from loan repayments

iii. Funds raised through borrowings in the international finan-

cial markets,iv. Other incomes received by the Bank e.g. through bilateral

and multilateral donors or incomes from investment

The AfDB is also authorized to establish or be entrusted with

Special funds, under Article 8 of the Agreement Establishing the

Bank. In conformity with these provisions the ADF and NTF wereestablished as the foremost special funds in 1972 and 1976.

Since then the Bank has established and manages several spe-

cial funds which are consistent with its purposes and functions.

The decision to open the Banks capital to non-African partici-

pation proved very positive, in terms of membership and capital

structure. As a result of the admission of non-regional members,

AfDBs authorized capital increased from about US$ 2.9 billion in

1982 to US$ 6.3 billion in 1983, and to US$ 22. 3 billion, follo-

wing a 200% Fourth General Capital Increase (GCI-IV) conclu-

ded in Cairo Egypt, in June 1987. A further 200 percent Sixth

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General Capital Increase (GCI-VI) concluded during the Annual

Board of Governors Meeting in Abidjan in May 2010 tripled the

Banks capital resources.

Consequently, at the end of December 2011, the AfDBs autho-

rized capital stood at UA 66.05 billion (USD 101.4 billion) while

the subscribed capital stood at UA 31.32 billion (USD 57.3 bil-

lion), of which the paid-up portion is UA 3.29 billion (USD 5.1 bil-

lion). Sixty per cent (60%) of the capital is subscribed by regio-

nal member countries and forty per cent (40%) by non-regional

member countries. The year-to-year dollar equivalent of the

authorized capital which is denominated in the Banks Unit of

Account (UA) depends on the annual rate of the UA, which in

December 2011 averaged USD 1.53527. The institution has

never recorded a loss and has consistently boosted its reserves.

Gross borrowings of the Bank as at the end of December 2011

amounted to UA 10.7 billion or USD 16.5 billion, while gross

reserves amounted to UA 2.6 billion or USD 3.4 billion

ADF Resources consist of: (i) subscription by State Participants

usually on a 3-year basis (ii) subscription by the Bank; (iii) funds

derived from operations accruing to the Fund (iv) other resources

received by the Fund. The bulk of the subscriptions successive3-yearly replenishments of the Fund were as follows:

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Replenishments Years Amount Appx. (USD billion)

ADF-I 1976-1978 0.327

ADF-II 1979-1981 0.712

ADF-III 1982-1984 1.00ADF-IV 1985-1987 1.50

ADF-V 1988-1990 2.80

ADF-VI 1991-1993 3.42

ADF-VII 1996-1998 3.20

ADF-VIII 1999-2001 3.38

ADF-IX 2002-2004 3.50ADF-X 2005-2007 5.40

ADF XI 2008-2010 8.90

ADF XII 2011-2013 9.50


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ADF-XI (2008-2010), achieved a record replenishment of UA

5.8 billion, a 52 percent increase over ADF-X replenishment.

In 2010, the Fund secured UA 6.10 billion or a 10.6 percent

increase in State Participants contributions for the ADF-XII

replenishment. As at the end of December 2011, cumulative

ADF subscriptions and other resources amounted to UA 17.9

billion or USD 27.5 billion

NTF resources are wholly contributed by the Government of

Nigeria. The initial capital of USD 80.0 million was replenished

in 1981 with USD 71.0 million. By December 2001, NTF

resources had risen to about UA 425.4 million or USD 655.2

million. The Funds resources however stood at UA 156.7 mil-

lion or USD 241.3 million at the end of December 2011.

Originally established to come to an end after 30 years on 25

April 2006, the NTF was extended for a two-year period. The

AfDB Board approved a further 10 year extension of the NTF

on 15 May 2008.


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II. Bank Group institutional and management

structure

A. Institutional structure

i. Board of Governors

Each member country is represented on the Board by a

Governor and an Alternate whose tenure is determined by the

country he/she represents. It is the supreme organ of the

Bank. The position of Governor is usually held by Ministers of

Finance and/or Economy of member states. The Board of

Governors issues general directives concerning the operatio-

nal policies of the Bank. For ADF Board of Governors, each

State Participant is represented by one Governor while

Governors of the African Development Bank are ex-officio

Governors of the Fund.

ii. Board of Directors

The Board is made up of 20 Executive Directors, elected by

the Board of Governors for a period of 3 years renewable

once. Regional members have 13 Directors while the remai-ning seven come from non-regional states. The Boards

(AfDB/ADF) exercise all the powers of the Bank except those

expressly reserved for the Board of Governors by the

Agreement establishing the Bank. The Boards are responsible

for the conduct of the general operations of the Bank. With

regard to the ADF Board comprising 14 Directors, seven areappointed by the State Participants, while the other seven are

designated by the African Development Bank from among the

regional Executive directors of the Bank.

Under the Banks organization chart the following three (3)

Departments--Operations Evaluations, Compliance Review &

Mediation Unit, Administrative Tribunal--come under the direct

control of the Board of Directors while the President exercises

oversight functions.


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iii. President

Elected by the Board of Governors, on the recommendation

of the Board of Directors, the President is the Chief Executive

and conducts the business of the Bank. The President is also

the legal representative of the Bank. He is elected for a term

of five years, renewable once. Since its inception the Bank

Group has had the following six (6) Presidents and one (1)

caretaker President:

Mamoun Beheiry (Sudan) 1964-1970

Abdelwahab Labidi (Tunisia) 1970-1976

Kwame Donkor Fordwor (Ghana) 1976-1979

Godwin Gondwe ( Malawi) Caretaker capacity - 1979-

1980

Babacar Ndiaye (Senegal) - 1985-1995

Omar Kabbaj (Morocco) 1995-2005

Donald Kaberuka (Rwanda) - 2005 -

The AfDB President is also the President of the Fund as well

as the Chairman of the Board of Directors. He determines the

organizational structure, functions and responsibilities as well

as the regional and country representation offices. He pro-poses to the Board of Directors the appointment of the Vice-

Presidents who assist him in the day-to-day management of

the Bank Group. Under a new structure effective from July 1,

2006 replacing the structure in place since January 1, 2002,

the AfDB has, besides the Presidency, 8 Vice-Presidencies

including the Offices of the Chief Operating Officer, the ChiefEconomist and the Secretary General, 43 Departments, 83

divisions and 13 Units.

B. Organizational and management structure

Office of the President

In the day-to-day assignments of the Presidency the following

offices, departments and units report to it directly or through

the Office of the Chief Operating Officer:


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Vice President/ Chief Operating Officer (VP/COO)

o Director in charge, Office of the Chief Operating

Officer (COO)

o Results and Quality Assurance (ORQR)

Results (ORQR.1)

Quality Assurance (ORQR.2)

Compliance and Safeguards (ORQR.3)

Gender and Social Development Monitoring

(ORQR.4)

o Operations Committee Secretariat (OPSC)

o Performance Monitoring Group (COPM)

o Programming and Budget Unit (COBS)

o Ethics Office (COEO)

Directly under the presidency

o Office of the President (SAPR)

o Operations Evaluation Department (OPEV)

Project and Programme Evaluation (OPEV.1)

Higher Level Evaluation ( OPEV.2)

o Compliance Review & Meditation Unit (CRMU)

o Security (SECU)o Administrative Tribunal(TRIB)

o Ombudsman (OMBU)

o External Relations & Communication Unit (ERCU)

By virtue of their work the following five horizontal

Departments also report directly to the President:

o Office of the Auditor General Department (OAGL)

Internal Audit Division (OAGL.1)

o General Counsel & Legal Services Department (GECL)

Public Sector Operations, Policy and Governance

Division(GECL.1)

Private Sector Division(GECL.2)

Finance Division (GECL.3)

Administrative & Financial Affairs Division (GECL.4)

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o Integrity and Anti-corruption Office (IACD)

o Strategy Office (STRG)

The Auditor Generals Department assists at all levels of the

Banks management including the Board of Directors by pro-

viding periodic, independent audits of financial, operational

and administrative activities. The General Counsel is respon-

sible for advising and assisting the Board of Governors, the

Board of Directors and the President of the Bank on all legal

matters and the implications of official actions taken and poli-

cies adopted. The Legal Services Department further advises

all organizational Departments and Units on the legal aspects

of financial, operational and administrative matters and pro-

poses suitable legal solutions. It participates in loan negotia-

tions and preparation of all agreements and contracts.

Office of the Vice-president and Secretary General (SEGL)

Since 27 March 2012, the Office of the Secretary General has

been upgraded to the rank of vice presidency, comprising the

following two divisions. (March 2012)

Board Proceedings & Documents Division (SEGL.1) Protocol & Elected Officers Services Division (SEGL.2)

The Office of the Secretary General is the Secretariat of the

Boards of Directors and Governors. It prepares records and

monitors their meetings, including the Annual General

Meetings (AGM) and the ADF replenishment meetings. TheOffice also manages protocol services and relations with the

host country. It coordinates the Banks information disclosure

policy.

Office of the Chief Economist (ECON)

The Office of the Chief Economist, (ECON) comprises

Development Research, the Statistics Departments and the

African Development Institute:

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o Development Research Department (EDRE)

Research Division (EDRE.1)

Networking & Research Partnerships Division

(EDRE.2)

o Statistics Department (ESTA)

Economic & Social Statistics Division (ESTA.1)

Statistical Capacity Building Division (ESTA.2)

o African Development Institute (EADI)

Program Design and Development (EADI.1)

Development Management and Policy Dialogue

(EADI.2)

The Knowledge and Information Services (EADI.3)

ECON is ranked as a vice-presidency. It has the responsibility

of: (i) conducting quality research to generate a deeper unders-

tanding of the development challenges facing Africa; (ii)develo-

ping an efficient mechanism for sharing and using knowledge

to enhance the Banks operations and programs; (iii) generating

and maintaining relevant databases to monitor and evaluate the

Banks development effectiveness;(iv) creating and leveraging

resources to support the generation, dissemination, and use of

knowledge in Bank policies and programs and RMCs. (v) orga-

nizing development capacity building through training. Throughthe knowledge operations of ECON, the Bank aspires to beco-

me a strong voice for Africa on development challenges.

Vice Presidency Finance (FNVP)

FNVP comprises of the following 3 Departments and Units:o Financial Management Department ( FFMA)

Asset & Liability Management Division (FFMA.1)

Credit Risk Management Division (FFMA.2)

Treasury Risk Management Division (FFMA.3)

o Treasury Department (FRTY)

Capital Markets & Financial Operations Division

(FTRY.1)

Cash & Current Accounts Division (FTRY.2)

Investments and Trading Room Division (FTRY.3)

Financial Technical Services Division (FTRY.4)

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o Financial Control Department (FFCO)

Internal Control Unit (ICU)

Accounts & Special Funds Division (FFCO.1)

Administrative Expenses Division (FFCO.2)

Loan Disbursements Division (FFCO.3)

Loan Accounting Division (FFCO.4)

o Staff Retirement Plan (SRPU)

FNVP is responsible for managing the financial resources of

the Bank Group through sound practices in borrowings,

investments and payments. It is also responsible for develo-

ping medium and long-term policies, guidelines and plans

including the staff retirement plan.

Vice Presidency Corporate Services (CSVP)

o Human Resources Department (CHRM)

Staff Planning & Recruitment Division (CHRM.1)

Compensation, Benefits & Compliance Division

(CHRM.2)

Staff Training & Development Division (CHRM.3)

Employee Health & Welfare Division (CHRM.4)

o General Services Department (CGSP) Operations & Maintenance Division (CGSP.1)

Corporate Procurement Division (CGSP.2)

Support Services Division (CGSP.3)

o Information Management Department (CIMM)

Applications Development & Enhancement Division

CIMM.1) Infrastructure & Telecommunications

Division(CIMM.2)

Client Technology Services Division (CIMM.3)

o Language Services Department (CLSD)

English Translation Division (CLSD.1)

French Translation Division (CLSD.2)

Interpretation Division (CLSD.3)

o Official Representation of Abidjan Head Office (ROSA)

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CSVP formulates and implements personnel and human

resources policies, promoting good management and staff

relations. It provides health services and manages Bank pro-

perty, procurements, supplies and travels etc. It manages

the Banks IT programmes. It is responsible for translating

Bank documents into English or French, providing interpre-

tation. It provides representation service links between the

Statutory Headquarters, Abidjan and the Temporary

Relocation Agency, Tunis.

Vice-Presidencies in-charge of operations

Three (3) vice-presidencies are in charge of Bank Group pro-

ject and programme operations as follows :

Operations I - Country & regional programmes & policy

(ORVP)

Operations II - Sector operations (OSVP)

Operations III - Infrastructure, private sector & regional

integration (OIVP)

i) Vice-Presidency, Operations I: Country & Regional

Programs & Policy (ORVP)

Comprises 9 Country, Regional and Policy Departments, as

well as 29 Regional and Country Offices including Abidjan as

at the end of March 2012.

o Country/regional department - West 1 (ORWA) ORWA countries : Benin, Burkina Faso, Cte

dIvoire, Ghana, Niger, and Nigeria

ORWA Field Offices: Ghana, Nigeria, Burkina Faso

o Country/regional department- West 2 (ORWB)

ORWB countries: Cape Verde, Gambia, Guinea,

Guinea-Bissau, Liberia, Mali, Sao Tome & Principe,

Senegal, and Sierra Leone.

ORWB field offices: Guinea-Bissau, Liberia,

Sierra Leone, Sao Tome & Principe, Senegal, Mali

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o Country/regional department - East 1 (OREA)

OREA countries: Burundi, Kenya, Rwanda,

Seychelles, Tanzania and Uganda

OREA field offices: Burundi, Kenya*, Rwanda,

Tanzania, Uganda

*Regional Resource Center

o Country/regional department- East 2 (OREB)

OREB countries covered : Djibouti, Comoros,

Eritrea, Ethiopia, Somalia , South Sudan, Sudan

OREB field offices: Sudan , Ethiopia

o Country/regional department- South 1 (ORSA)

ORSA countries : Lesotho, Namibia, South Africa,

Swaziland and Zimbabwe

ORSA field offices: South Africa*, Zimbabwe

*Regional Resource Center

o Country/regional departments - South 2 (ORSB)

ORSB countries: Angola, Madagascar, Malawi,

Mauritius, Mozambique and Zambia

ORSB field offices: Angola, Madagascar, Malawi,

Mozambique, Zambia

o Country/regional department- Center (ORCE)

ORCE countries: Cameroon, Central African

Republic, Chad, Congo Democratic Republic,

Republic of Congo, Equatorial Guinea, and Gabon.

ORCE field offices: Cameroon, Chad, DR Congo,Gabon,

o Country/regional department - North 1 (ORNA)

ORNA countries : Egypt, Libya, and Tunisia

ORNA field office(s): Egypt

o Country/regional department - North 2 (ORNB)

ORNA countries: Algeria, Mauritania and Morocco.

ORNB field office(s): Algeria and Morocco


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o Partnership & cooperation unit (ORRU)

o Resource mobilization unit (ORMU)

ii) Vice-Presidency, Operations II: Sector Operations

(OSVP)

o Agriculture & agro-industry department (OSAN)

Agriculture 1 division (OSAN.1)



Natural resources & environmental management

division(OSAN.4)

o Human development department (OSHD)

Poverty reduction and social protection division

(OSHD.1)

Education, science & technology division(OSHD2)

Health division (OSHD.3)

o Governance, economic& financial management

dept.(OSGE)

Governance division (OSGE.1)

Economic & financial management division(OSGE.2)

o Fragile states unit (OSFU)

iii) Vice-Presidency, Operations III: Infrastructure,

Private Sector & Regional Integration (OIVP)

This Vice-Presidency covers a number of core sector opera-

tional initiatives of the Bank Group:

o Energy, environment and climate change department

(ONEC)

Energy division 1 ( ONEC.1)

Energy division (ONEC.2)

Environment & climate change division (ONEC.3)

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o Transport and ICT department (OITC)

Transport division 1(OITC.1)

Transport division 2 (OITC.2)

ICT4D (Vacant)

o Private sector department (OPSM)

Operations support division (OPSM.1)

Industries &services division (OPSM.2)

Infrastructure finance division (OPSM.3)

Financial institutions division (OPSM.4)

Portfolio management division(OPSM.5)

o Water & sanitation department (OWAS)

Water & sanitation division 1 (OWAS.1)

Water & sanitation division 2 (OWAS.2)

African water facility unit ( AWTF)

o NEPAD, regional integration & trade department (ONRI)

NEPAD division (ONRI.1)

Regional integration & trade division (ONRI.2)

Infrastructure consortium of Africa (ICA)

C. Staff strength

The Bank Group's total regular staff as at 31st December

2011 was 1,902: comprising 1,213 Professionals (PL) and

689 regular General Services staff (GS). In terms of gender,

28% of PL staff and 55% of GS staff are female. In 2011 the

Bank recruited 29 local staff for the field offices bringing theirtotal number to 315.

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III. Bank Group operations, policies, initiatives &

achievements

A. Lending instruments

In the 1960s and 1970s, Bank Group operations were orien-

ted almost exclusively to project lending, which involves

investment in identifiable sector activities. Since 1980, in

response to changing economic circumstances of regional

member countries, the Bank Group has greatly diversified its

lending, making use of several different lending instruments.

The instruments are as follows:

i) Project loans: Investments aimed at creating specific

productive assets or increasing identifiable outputs;

ii) Lines of credit: Funds channeled through national or

sub-regional development finance institutions aimed at

financing a number of specific projects, most frequently

from small and medium-scale enterprises;

iii) Sector investment and rehabilitation loans investments

aimed at strengthening or rehabilitating sector specific

planning, production or marketing capabilities; often

used to finance imports of equipment or inputs for asector;

iv) Sector adjustment loans: Credits aimed at supporting

policy changes or institutional reforms in a specific sector;

v) Structural adjustment loans: Credits aimed at fostering

specific macro-economic policy reform;

vi) Technical assistance operations: Loans or grants thatprovide expertise aimed at increasing capabilities of

regional or national institutions that finance studies nee-

ded for project preparation.

The first three lending instruments are referred to, collective-

ly, as project or programme lending. The designation poli-

cy based lending (PBL) applies to the fourth and fifth cate-

gories of sectoral and structural adjustment lending.

Technical assistance operations are financed only by the

ADF through the Technical Assistance Fund (TAF).

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v) Budget support and country system instruments

Over the past few years the Bank has increased its use of a

new lending framework for the projects it finances. Budget

support is a framework where the Bank generally provides

funds to the countrys ministry of finance (or equivalent) and

for general public finance budget spending covering the pro-

ject. In doing so the Bank implements the project through

the country systems approach which would rely solely on

a borrower governments systems (e.g. a countrys relevant

national, sub-national, or sectoral implementing institutions

and applicable laws, regulations, rules, procedures, and

track records) rather than the Banks own safeguard imple-

mentation policies and procedures for project implementa-

tion. Such a framework has produced positive results in

terms of quick disbursements under certain conditions

clearly reviewed during appraisal and approved by the

Board even though the country systems approach often

raises several significant good governance concerns that

the Bank has to monitor.

B. Project cycle

The various stages from country programming to project

completion and post evaluation are known collectively as

AfDB Group's project cycle.

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Country

Partnership

Strategy

Preparation

Appraisal/Approval

Implementation

Evaluation

ABDs

project

Cycle


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iv. Loan negotiation

During negotiations, agreement should be reached on the fol-

lowing: a) Objectives and description of the project, studies or

programmes; b) loan amount in foreign and local costs of the

project and the financing plan; c) a tentative list of goods and

services to be procured; d)the schedule of execution and

expenditure; e) the disbursement methods selected by the

borrower; f) the tentative schedule of disbursements including

precise information on account numbers and corresponden-

ce banks; g) the procurement methods and dates of bidding

announcements; h) precise information on the executing

agency and the project implementation unit; i) proposed rea-

listic date for loan signature and deadlines for first and last dis-

bursements; j) for co-financed projects, respective financing

plans, cross-effectiveness and other miscellaneous informa-

tion.

v. Board approval

After negotiations with the government, the loan proposal is

submitted to AfDB Board of Directors for approval.

vi. Loan agreements

The loan takes effect once certain agreed conditions are met.

The following are some of the standard conditions that prece-

de disbursements: a) designate authorized signatories for the

loan resources; b) present a legal opinion; c) submit theinvestment schedule; d) present a list of goods and services

to be procured; e) open and maintain a special project

account; f) establish a project implementation unit; g) any

other condition approved during negotiations.

vii. Loan effectiveness

The loan takes effect once certain conditions agreed to pre-

cedent to first disbursement are met. This is also known as

loan effectiveness. In addition to other conditions which may


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be fulfilled later, the following are some of the standard condi-

tions: a) designate authorized signatories for the loan

resources; b) present a legal opinion; c) submit the investment

schedule; d) present a list of goods and services to be procu-

red; e) open and maintain a special project account; f) esta-

blish a project implementation unit; g) any other condition

agreed during negotiations.

viii. Implementation

Project implementation starts from the moment the project is

declared effective. AfDB Group projects are implemented by

the executing agency according to the agreed schedule and

procedures. The supervision of implementation, however,

enables the Bank Group to make sure the physical realization

of the project is progressing smoothly and in accordance with

the implementation schedule and details. Borrowing countries

are generally advised and encouraged to complete these acti-

vities prior to loan negotiation and loan signature to minimize

delays in project implementation.

ix. Post evaluation

Generally, the Banks Evaluation Department (OPEV) is res-

ponsible for determining whether the objectives of Banks pro-

jects and programs are being met. The key performance indi-

cators used in evaluating the success of projects and pro-

grams are developed around the following: i) the relevance

and achievement of objectives at project appraisal; ii) the bor-rowers implementation performance; iii) adherence to project

cycle timeframe, the performance and role of the Bank; iv) ins-

titutional development performance of the project; and v) the

sustainability of project or program results.


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C. Bank Group procurement, disbursements

and fiduciary services

A major aspect of Bank Group operations involves effective

procurement of goods and services as well as timely disbur-

sement through efficient guidelines and procedures develo-

ped and implemented by the Banks Procurement and

Fiduciary Services Department.

This Department has two Divisions, one in charge of

Procurements and the other in charge of Fiduciary services.

The Department determines, among other things, the eligibili-

ty and origin of goods and services, supervises the packaging

of contracts, monitors the process and mode of bidding and

advises on refinancing processes.

Bank Group disbursements are generally made according to

one or more of the following methods agreed upon during

negotiations:

i. Reimbursement method under which the Bank reim-

burses payments made by the borrower for certain goods

and services.ii. Revolving Fund method under which the Bank may make

renewable advance payments from which the borrower

may make payments for certain items on the approved list

of categories of expenditure.

iii. Guarantee of Letters of Credit method. The Bank does

not itself issue Letters of Credit. It, however, issues gua-rantees to reimburse amounts due under letters of credit

opened in favour of suppliers at the request of a borrower.

iv. Direct payment to suppliers or contractors involved in a

project.

With regard to procurements, it is the policy of the Bank

Group that in all cases of procurement, a system of competi-

tive bidding be used. Procurement of goods and services

under the Bank Groups loans is generally made through inter-

national competitive bidding, which requires advertisement to


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be made within and outside the borrower country as well as

notification to the international community. Subject to the

Banks prior approval other forms of procurement would be

used whenever it can be established that this is done with due

regard for economy and efficiency in the execution of the pro-

ject.

The Procurement and Fiduciary Services Department is

consequently at the epicenter of the Banks benchmark image

in matters of financial good governance and operational

accountability. In all cases, Bank Group operations follow pro-

ject cycle activities outlined earlier from project initiations,

through preparation, appraisal and approval to implementa-

tion where departments like Procurement and Fiduciary

Services are required to ensure that the projects are executed

with due regard for economy, efficiency and good financial

management procedures.

D. AfDBs promotion of due process, integrity

and anti-corruption measures in Africa

Accountability, responsibility, system control, respect of due

processes and anti-corruption procedures have made AfDB acredible and well managed financial institution in Africa. These

are watch words in the Banks efforts to ensure good gover-

nance in its operations within the Bank and in its Regional

Member Countries. As the Bank fine-tuned its organizational

structure in April 2010, it separated the Banks investigative

capacity from its audit function, thus upgrading the Integrityand Anti-Corruption Division established in November 2005,

to an independent department reporting directly to the Banks

President and the Board of Directors. This has strengthened

the integrity function in the context of its fast-growing soverei-

gn and non-sovereign operations. This has also helped to

promote tighter adherence to the highest standards of corpo-

rate governance and integrity both within the Bank itself and

in the execution of Bank projects.


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The Integrity and Anti-Corruption Department (IACD) has thus

become the centre piece of the Banks effort to improve the

continent's investment climate and reduce the risk of prohibi-

ted practices such as fraud and corruption in the Bank and

Bank-financed projects. The IACD investigates allegations of

prohibited practices such as fraud and corruption in Bank

Group activities and related staff misconduct. It also assists

regional member countries to detect and deter fraud and cor-

ruption in Bank Group activities. Through internal seminars,

workshops and capacity building programmes IACD has

created anti-corruption and fraud awareness and security

measures among Bank staff.

E. Terms of AfDB Group loans

AfDB

Interest.

Commitment charge

on disbursement

balance

Repayment period

Provides non-concessionary loans that

carry financial charges that reflect the

direct market cost of funds. Variable andreviewed every six months by the Board

(Private Sector loans may carry other spe-

cific conditions)

1%

20 years including a grace period of 5

years maximum

ADF

Interest

Service charge

Commitment fee

Repayment period

TA loans

Group's main concessionary window

No interest rate

0.75% per annum on outstanding balance

0.50% per annum on undisbursed amount

50 years including a 10 years grace period

50 years including a 10-year grace period

which can be 45 years if study does not

lead to a bankable project;

NTF

Interest

Commitment charge

Repayment period

Terms and conditions are mid-way bet-

ween those of the AfDB and ADF

4%

0.75%

15-25 years maximum including a 5- year

period


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F. Bank Group resource allocation by country categories

Allocations of Bank Group resources for country operations

consider the following conditions:

The volume of resources at the disposal of each of the

three affiliate institutions.

An interplay of priorities outlined in the countrys develop-

ment plan, Bank s Country Strategy Paper and the coun-

trys absorptive capacity.

The countrys special geographic and political situation

e.g. for land-locked countries, fragile states , post-conflict

states, emergency situations

Level of indebtedness e.g. HIPC countries.

Country category based on GNP per capita income and

debt servicing capacity.

The AfDB is the Banks non-concessionary lending win-

dow which supports development activities mainly in 13

middle income countries with GNP per capita above

US$990 classified under Category C countries as well as

2 blend countries, classified under category B countries,

which also have access to ADF resources for project and

program financing.

Category C - Fifteen (15) countries eligible for AfDB

resources only:

Algeria, Angola, Botswana, Cape verde, Egypt, Equatorial

Guinea, Gabon, Libya*, Mauritius, Morocco, Namibia,Seychelles, South Africa, Swaziland, Tunisia.

Category B - One country eligible for a blend of AfDB and

ADF resources:

Nigeria.

The ADFs main objective is to reduce poverty by providing

low-income RMCs with concessionary loans and grants for

projects and programs, and with technical assistance for stu-

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28

dies and capacity-building activities. The resources of the

Fund are largely devoted to the 38 low-income member coun-

tries or Category A countries which have GNP per capita

below US$ 785 and generally, do not qualify for the AfDB's

non-concessionary resources. A big part of ADF operations

consists of grants provided by the Technical Assistance Fund

to finance feasibility Studies and institutional capacity building.

Category A - Thirty seven (37) countries eligible for ADF

resources only:

Benin, Burkina Faso, Burundi, Cameroon, Central Africa

Republic, Chad, Comoros, Congo, Congo Democratic

Republic, Cte dIvoire, Djibouti, Eritrea, Ethiopia, Gambia,

Ghana, Guinea, Guinea Bissau, Kenya, Lesotho, Liberia,

Madagascar, Malawi , Mali, Mauritania, Mozambique, Niger,

Rwanda, Senegal, Sierra Leone, Somalia, Sudan, Tanzania,

Togo, Uganda, Zambia, Zimbabwe.

F. Bank Group cumulative loan and grant approvals by

institutional window

Between 1967 and 2011, the Bank Group approved 3,639loans and grants, worth UA 60.1 billion or USD 92.4 billion. Of

the cumulative approvals, the AfDB window accounted for UA

35.4 billion (USD 54.1 billion) or 58.9 percent, the concessio-

nary ADF window for about UA 24.4 billion (USD 37.5 billion)

or 40.6 percent, and the NTF resources for about UA 0.3 bil-

lion (USD 0. 5 billion) or 0.5 percent respectively.


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G. Bank Group cumulative lending by sector as at the end

of December 2011

The Bank Groups prioritization of infrastructure projects conti-

nued in 2011. From 1967-2011, the main sectors of cumula-

tive Bank Group approvals were as follows:

58.9%

40.6%

0.5%Percentage

AfDB

ADF

NTF

Figure 1 Cumulative Bank Group Loan and Grant

Approvals by Institution, 1967-2011

Sector ComponentsIn BillionUA

In USDBillion

Percentage

Infrastructure(transportation, energy,water, sanitation andcommunications)

25.5 39.3 42.4

Multisector

(public sector manage-

ment, , structural adjust-ment , debt relief ,privatesector development,governance, anticorrup-tion, import facilitation,export promotion and ins-titutional support)

10.2 15.6 16.9

Finance

Development banking,commercial banking, non-

banking intermediation,microfinance

7.9 12.1 13.1

Agriculture &agro-industry

Food crosp, cash crops,fisheries, agro-industry,forestry, irrigation anddrainage

7.6 11.7 12.7

SocialEducation, health, popu-lation, gender equity,poverty reduction project

5.6 8.9 9.6

Industry

Manufacturing, tourism

mining, quarrying, SMEs 2.9 4.4 4.8

OthersMinor sectors urban plan-ning, emergency assis-tance etc

0.4 0.4 0.5

Total 60.1 92.4 100

Below is the figure of the above table of Bank Group cumulative loan and grant

approval by sector:


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H. Distribution of cumulative Bank Group approvals by

sub region

Distribution of cumulative Bank Group lending from 1967 to

2011 to all sub regions of Africa was as follows:

North Africa: UA 17. 5 billion (USD 26.9 billion)

or 28.5 percent,

West Africa: UA 13.3 billion (USD 20.4 billion)

or 21.6 percent,

Southern Africa: UA 11.5 billion (USD 17.7 billion)

or 18.7 percent,East Africa: UA 9. 2 billion (USD 14. 1 billion)

or 15.0 percent

Central Africa: UA 5.3 billion (USD 8.1 billion)

or 8.6 percent, and

Multiregional: UA 4. 7 billion (USD 7.2 billion)

or 7. 6 percent.

Source - Derived from 2010/11 AfDB Annual Report, 28 March 2011

I. Trend of Bank Group operations

North Africa accounts for nearly 50 percent of AfDB non

concessionary lending mainly for infrastructure and almost a

third of the Bank Group cumulative approvals. North Africa

and Southern Africa account for nearly 70 per cent of Bank

Group lending. On the other hand, West and East Africa sub-

42.4%

16.9%

13.1%

12.7%

9.6%

4.8% 0.5%

Percentage

Infrastructure

Multi-sector

Finance

Agric & agro-industry

Social

Industry

Others

Figure 2 Cumulative Bank Group Loan and Grant

Approvals by Sector, 1967-2011


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regions account for over 60 percent of ADF concessionary

resource lending. The Nigeria Trust Fund has committed

resources even in countries that traditionally do not depend

on non-concessionary resources except in Central Africa

region. Another trend in 2011 is the rapid rise of Bank Group

commitments to Southern Africa region, the increase of com-

mitments to multinational projects.

J. Bank Group financial sector products

The Bank offers the following range of financial products desi-

gned to meet the needs of various clients:

Loan products through an increased menu of currencies

including the US Dollar, Euro, Yen, Pound Sterling and the

Rand.

Choice of interest rates including fixed, floating and

variable interest rates.

Risk management products including currency swaps,

caps and collars on interest rate swaps as well as com-

modity hedges.

Guarantees including full guarantees, partial credit and

partial risk guarantees. Equity participation through ordinary stocks, redeemable

preferred stocks or debentures.

Other financial services including loan syndication and

advisory services.

K. Financial management achievements

i. Asset and liability management

Balance sheet transformation initiated in 1997 as part of

Bank-wide financial reforms continues to be implemented.

The objective is to further reduce the sensitivity of the Banks

key financial performance indicators to adverse fluctuations in

market interest rates and currency exchange rates.

ii. Credit risk management


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Country credit risk remains the largest single source of risk for

the Bank which continues to improve its country rating sys-

tem serving as a key input into the determination of the Banks

capital adequacy indicators, country exposure limits, and the

appropriate level of the general provisions. The Bank has

equally strengthened its in-house capacity to assess and

manage commercial risks linked to private sector lending acti-

vities and micro isolated (enclave) projects.

iii. Capital market operations

The Bank aims to access a wider range of markets and cur-

rencies and has for the first time tapped into both the Hong

Kong and the Singapore Dollar market. It has also used its

Euro Commercial Paper programme to enhance the manage-

ment of its liquidity portfolio. The Bank has furthermore esta-

blished a global debt issuance facility, which is a universal

debt documentation platform, designed to replace the Euro

Medium-Term Notes (EMTN) programme. This platform will

maximize the Banks financing flexibility and allow ready

access to both the Euromarkets and new domestic markets.

L. Selected Bank-led Initiatives

NEPAD Lead Agency

Infrastructure Project Preparation Facility

Infrastructure Consortium for Africa

Debt Relief under HIPC, MDRI, PCCF

Rural Water Supply & Sanitation Initiative African Water Facility

Multi-donor Water Partnership Programme

Connect African Initiative to bridge gaps in ICT

infrastructure

Making Finance Work in Africa

Fragile States Facility

The Eminent Speakers Programme

Annual Economic Conference


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The African Water Facility (AWF)

AWF was established through the initiative of African

Ministers Council on Water (AMCOW) to mobilize and distri-

bute resources at the national and trans-boundary levels. The

Facilitys 3-year Operational Program has been updated for

2009-2011 and requires UA 125.6 million to implement. At

end-December 2010 a total of UA 102 million had been pled-

ged to AWF of which UA 10 million had been secured. AWF

has to date leveraged UA 215 million to finance water opera-

tions

The Multi-Donor Water Partnership Program (MDWPP)

was established by the Bank jointly with Netherlands, Danish,

and Canadian governments to operationalize the 2000

Integrated Water Resources Management (IWRM) policy.

N. Highlights of AfDB Fragile States Initiatives

In assisting African fragile states and states recovering from

social and political crisis, the Bank established a Fragile

States Facility (FSF) which provides support in the following

three (3) areas:

Supplemental investment for rehabilitation in the Banks

priority areas,

Arrears clearance. Generally, the Bank has continued to

participate in the mobilization of resources under enhan-

ced heavily indebted poor countries (HIPC) Initiative forover 33 eligible Regional Member Countries.

Targeted support for capacity building and technical

assistance.

FSF has enhanced ADF allocations to fragile states over and

above the country allocation provided under the performance-

based (PBA) mechanism. FSF is a rapid response instrument

which complements normal Bank Group assistance to the

fragile states. In fact in 2008, the Bank approved its first bud-

get support for Liberia under the newly established Fragile

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P. AfDB championing Africas green growth and climate

change operations

The Bank established the Energy, Environment and Climate

Change Department in 2010 to align its core operations in

energy and climate change as a response to RMCs evolving

needs. Environment and Climate Change is one of the 3

Divisions in the Department. The Bank also established

Quality Assurance and Results Department (ORQR) to guide

all Bank operations departments through polices, seminars

and capacity building programmes, to ensure that Bank-

financed projects and programmes comply with globally

approved environmental and social safeguards. ORQR assists

the Banks Task Managers in mainstreaming climate change

through project cycle operations and dialogue in RMCs, while

undertaking advocacy assignment for resource mobilization.

In conducting environmental and social assessment, ORQR

assists the Banks operations departments to apply due dili-

gence and appropriate supervision to ensure compliance with

environmental and social safeguards with screening manuals,

and tools. It has developed appropriate regional training pro-

grammes to enable Bank staff and RMC officials to apply cli-

mate change safeguards, policies and guidelines.

AfDB is championing Africas position on climate change and

green growth within the international community. These inclu-

de all the MDB meetings including Cop 15 in Copenhagen

and Cop 16 in Cancun in 2010, Cop 17 in Durban, the Busan

high-level forum on global aid effectiveness in early 2012, andthe forthcoming Cop18 in Rio. The Bank is also championing

the establishment of an African Green Fund platform. Over the

past few years AfDB has projected climate change as a cor-

porate priority for Africas development. The Banks resolve to

mobilize and host climate change funds is to ensure effective

alignment of climate change investments to Africas own rea-

lities and provide African governments, de facto ownership of

climate change investment decisions. The Bank has consi-

derable on-the-ground comparative advantages and expe-

rience to host the African Green Fund. Some of these advan-

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tages include AfDBs strong infrastructure portfolio, which

makes adaptation and climate resilience operations possible

through transport, energy and water operations. Africa

requires about 40 percent of the global funds for enhanced

actions on mitigation, adaptation, enhanced technology deve-

lopment transfer and capacity enhancement. AfDB President

Donald Kaberuka has systematically called on the internatio-

nal community to support the establishment of an Africa

Green Fund, considering the Banks comparative advantages

to host the fund.

Crucial roles AfDB can play in the area of climate change and

green growth include:

Assisting RMCs in low-carbon growth initiatives including;

combating deforestation; the reduction of green gas emis-

sions such as methane released from landfills, and moderni-

zing of public transport systems e.g. using the guided bus

system. The Bank should also realize the climate-proofing of

all its projects. The Bank can assist in building greener cities.

Due to the environmental and health problems resulting

from rapid urbanization, the Bank should assist RMCs and

local councils through improving systems for the manage-ment of solid waste, reducing urban waste and the preserva-

tion of wetlands. The Bank should coordinate the sharing of

knowledge on green technologies that mitigate the risk of cli-

mate change. AfDB President was appointed by the UN

Secretary-General as member of the High-level Advisory

Group on Climate Change, thus positioning the AfDB as alead institution in Africa in the subject.

Q. Existing and potential Multi-donor Trust Funds

For private sector

Fund for African Private Sector Assistance (FAPA)

Making Finance Work for Africa

Africa Financing Partnership

African Guarantee Facility

Microfinance Multi-donor Trust Fund

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Population

Fund on Migration and Development

Water and sanitation sector initiatives

African Water Facility (AWF)

Multi-donor Water Partnership Program (WPP)

Rural Water Supply and Sanitation Initiative (RWSSI)

Infrastructure initiatives

NEPAD Infrastructure Project Preparation Facility (NEPA

DIPPF)

ICT4D Trust Fund

Governance initiatives

Multi-donor Governance Trust Fund

Agriculture

Agriculture/Natural resources initiatives

Africa Fertilizer Financing Mechanism

Environment & Climate Change

Congo Basin Forest Fund

Climate Adaptation and Risk Management Trust Fund Clim-Dev Africa Special Fund

Education & Capacity building

Higher Education, Science and Technology Trust Fund*

Regional integration South-South and Regional Cooperation Trust Fund *

Fragile states initiatives

Fragile States Facility

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R. Bilateral Trust Funds Resources Available within the

Bank

AfDB is involved in active resource mobilization through trust

funds. Bilateral and multilateral partnerships thus constitute

the third window of Bank Group sources.

Partnership and Cooperation Unit of the Bank initiate partner-

ship framework agreements, mobilizes and administers bila-

teral and multilateral technical cooperation funds from over 25

countries for project activities including feasibility studies, trai-

ning, capacity building, seminars and other development pro-

grammes. Previously, the current reforms being implemented

by the Banks trust funds were generally tied to the donor

countries experts and specific sectors of donor interests as

follows:

Austria: Water and sanitation, environment, renewable ener-

gy and transport

Belgium: Human development (health & education), agricul-

ture, infrastructure, private sector development and gender-

related activities.

Belgium (Wallon Region) private sector development, agroindustries, transfer of technology, capacity building.

Canada: Human & social development, governance & policy,

water, private sector development, telecommunication, gen-

der, environment, capacity building, training, good governan-

ce, regional economic integration, private sector develop-

ment, environment, gender, policy articulation, studies, capa-city building

China: Activities covered are project identification, prepara-

tion, studies.

DenmarkAll sectors and activities

Finland: Environment, climate change, adaptation and miti-

gation, science and technology related to renewable and

clean energy, forestry management studies, technical assis-

tance France: Sectors of interest include remittances, invest-

ment climate, studies, and technical assistance.

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India:All sectors are included and activities covered are pro-

ject identification, preparation, supervision, studies.

Italy: Infrastructure - water and energy including renewable

energies Focal countries of interest include : Ethiopia,

Mozambique, Kenya, DRC, Sierra Leone, Liberia, Mali, Niger

and Mauritania and activities covered are project identifica-

tion, preparation, evaluation

Japan: Policy and Human Resources Development Grant

(PHRDG),poverty related strategy and capacity building activi-

ties in ADF only countries/HIPC eligible countriesand activities

covered are project identification, preparation, evaluation, stu-

dies, training, workshops resource persons, capacity building

Korea: Infrastructure and natural resources, information and

communication technology, knowledge sharing on Koreas

economic development experience, human resources deve-

lopment, and implementation of Korea-Africa Economic

Cooperation (KOAFEC) Action Plans

Nigeria: Capacity building & regional integration in the areas

of science & technology, human development (health & edu-

cation), agriculture, public administration, business & finance

pre-feasibility and feasibility studies.

The Netherlands: Infrastructure, private sector, regional inte-

gration activities, preparation and implementation of specificentrepreneurship development programmes, including fran-

chising, women entrepreneurship and/or specific pro-

grammes for growth oriented enterprises (debt/equity funds

with TA

Norway (NORAD): All sector studies and consultancy ser-

vices relating to the preparation, execution and supervision ofdevelopment projects and programs

Portugal: Studies, training, private sector development infra-

structure, renewable energy and energy efficiency, good

governance and capacity building, agriculture, water and pro-

motion of Portuguese language in the Bank's operations pro-

ject cycle activities human resource development, policy and

sector studies.

Spain:Transport, environment, social sector, industry, public

utilities and activities covered are project identification, prepa-

ration, evaluation, studies, and secondment of Experts

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Sweden: Urban development strategy, studies, training and

the activities covered are project identification, preparation,

evaluation, supervision, technical assistants

Switzerland: Secondment of Swiss expert in water sector

training, seminars/conferences (resource persons) .

United Kingdom (DFID): Infrastructure and water, governan-

ce, climate change and clean energy, institutional strengthe-

ning, enhanced collaboration initiatives, knowledge manage-

ment & statistics. Activities covered are consulting services

and technical assistance in support of project cycle activities,

policy and sector studies, training, capacity building and pro-

vision of institutional support.

S. Achievements and perspectives under Trust Fund

Reforms

By the end of 2011, the African Development Bank (AfDB) has

made substantial progress under its Trust Fund Reform policy

in moving away from tied bilateral funds to multi-donor Trust

Funds most of which are thematic in nature. As of the end of

2011, the Bank had 320 on-going trust fund projects for a

total of USD 421million, 40 percent of which were in know-

ledge-based activities. In 2011 alone, a total of USD 127 mil-lion of trust fund resources were mobilized, of which USD 112

million was under multi-donor thematic funds. As of the end

of December 2011, the Bank managed 10 thematic funds for

a total of about USD 185 million compared to USD 14.2 mil-

lion available for use under the existing ten bilateral funds. Two

new thematic trust funds were established in 2011 namely theSouth-South cooperation trust fund with Brazil (USD 6million)

approved by the Board in March 2011 and the Sustainable

energy fund for Africa with Denmark pledging USD 57 million.

It was a approved by the Board in July 2011.

The challenge facing the Bank still remained that of greater

and integrated utilization of trust funds, to ensure value for

trust fund money and more results. Under a broader scope

of trust fund and special funds review, the AfDB is equipping

itself to address demand driven funds for greater impact, and

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the constant competition for donor resources. The AfDBs

partner donor countries however, have sustained their sup-

port for the Bank despite difficult financial and budgetary

situations in their countries.

T. AfDB decentralization roadmap

AfDB decentralisation exercise revolves around three key

pillars: strengthening the Banks existing field offices, expan-

ding its presence in countries coming out of conflicts, conso-

lidating overall regional capacity, quality and efficiency of the

Banks on-the-ground operations in regional member coun-

tries, with the need to work as one Bank. The Board of

Directors of the African Development Bank (AfDB) on 8 April

2011 approved a five year 2011-2015 decentralization strate-

gy. A permanent committee on decentralization (PECOD) was

established in January this year, with the responsibility of

implementing a comprehensive and transparent action plan to

ensure reasonable performance on the decentralisation road-

map in the short run. Under the action plan, the Bank has

opened four field offices in Liberia, Togo, Central Africa

Republic, and in Burundi, all of which are classified under the

Banks post conflict countries. Resident representatives wereappointed for Togo and Central African Republic etc. In addi-

tion the Bank established two pilot Regional Resources

Centers in Nairobi, Kenya and Pretoria, South Africa and their

respective directors assumed duty in January 2012. The

Bank has further re-classified its regional offices in Gabon and

the Democratic Republic of Congo as country offices.U. AfDB operational risk management framework

On 7 March 2011, the Board approved a revised operational

risk management framework following increased spotlight on

the financial services industry after the global financial crisis.

The framework is, a high priority for the Bank as it had made

an in-depth assessment necessary to mitigate possible ope-

rational risks of the Bank. Included in the expected benefits

from the revised framework are: minimizing the risks associa-

ted with the Banks decentralization agenda, enabling a sys-

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tematic process of identification and assessment of operatio-

nal risk exposures of the Bank, while fostering well defined

accountability processes and responsibilities for managing

risks. The framework also provides for consistent and timely

risk reporting as well as efficient allocation of risk capital. Risk

management is a dynamic process and underscored the cru-

cial need for all staff to understand, and where possible, be

trained in risk management. The Bank acknowledges and

embraces a coordinated risk management approach so as to

ensure a Bank-wide ownership of risk management proce-

dures and guidelines.

V. AfDB Promotes Sustainable and inclusive economic

development for Africa

Inclusive development does not mean a one-size-fit all

approach to development but a way of deploying existing

capacities in various sectors in African countries to work toge-

ther for the good of the continent. Inclusive growth was the

main theme of the 2011 Annual Meetings in Lisbon, in the

wake the 2011 revolution in Tunisia and other parts of North

Africa. The AfDBs inclusive growth agenda aims at promoting

sustainable long-term development fostering job-creating andpro-poor economic growth.

Attainment of the inclusive growth agenda would entail: (i)

increased employment opportunities for all, to support pro-

ductivity gains and economic growth, and also to create a

sense of dignity and control over peoples own destiny; iiachieving value for money and accountability in service deli-

very fighting corruption and promoting voice in decision

making, making sure public money works to deliver services

to all including the poorest; (iii) inclusion and social cohesion,

including safety nets and other risk protection mechanisms;

(iv) targeted support towards rural development, the youth,

skills development, special categories such as the elderly, etc.

The Bank is partnering with Regional member countries and

other donors in ensuring sustainability of the development

gains to be made. This is to avoid possible risks of having an

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ever-expanding inclusive development agenda for the conti-

nent that leads to too many objectives, loss of sectoral exper-

tise and the need for strategic selectivity.

W. AfDB and the knowledge industry

The AfDB should be seen as a Bank that offers advice,gui-

dance, identification and dissemination of best practices. In

order for the Bank to become an honest and trusted know-

ledge broker and Africas leading voice in the global arena on

development issues, it must aspire to be the center of excel-

lence. In 2010, the Bank established the Office of Chief

Economist to spearhead knowledge based activities, imple-

ment four strategic knowledge management and develop-

ment (KMD) pillars which seek to establish and entrench a

knowledge culture within the Bank and in Africa. Below are

some knowledge-based activities of the Bank:

Research studies on relevant development issues in

Africa; Inequalities in Middle-Income Countries.

Production and disseminate of annual and biannual flag-

ship publications including: The African Economic

Outlook produced annually in collaboration with theOrganization for Economic Cooperation and

Development (OECD) and the Economic Commission for

Africa, the African Development Report which analyses

major development issues in Africa, The Africa

Competitiveness Report (ACR) a biennial publication pro-

duced jointly with the World Bank and the WorldEconomic Forum and the African Development Review

(ADRv)

Organisation of ad-hoc advocacies, colloquia, seminars

and studies on Africas emerging development issues

such as The food prices crisis in Africa: issues and the

AfDBs response, the African response to the Global

Financial Crisis.

Organization of Eminent Speakers Program with

renowned personalities invited to share their views and

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experience on challenging development issues facing

Africa. Speakers in the past included Professor Paul

Collier of Oxford University who gave a talk on post-

conflict recovery; Sir Nicholas Stern of the London School

of Economics who addressed the problem of climate

change, former Senegalese President Abdou Diouf, who

examined the role of regional integration, PlaNet Finance

President and micro-finance specialist, Jacques Attali,

who made a presentation on the Financial Crisis and the

Role of Microfinance, Nobel laureate , Wole Soyinka

who spoke the democracy and development, among

others.

Compiles and maintains a statistical data base to support

country operations and contributes to the effective

Development of Statistical Capacity and Systems in

Regional Member Countries. The Bank provides econo-

mic and social statistics support for the planning and pre-

paration of censuses and surveys in economic and social

sectors; households, prices and living conditions. This is

a very important means of harmonizing and validating sta-

tistical indicators continent wide.

Some notable statistical publications of the Bank include:

Selected Statistics on African Countries which presentsdata on major development indicators of African countries

and regions ; Gender, Poverty and Environmental

Indicators for African Countries that provide some infor-

mation on the broad development trends in the 53 African

countries; Compendium of Statistics on Bank Group

Operations; and, AfDB Statistics Pocketbook which pre-sents summary economic and social data on regional

member countries and on the operational activities of the

African Development Bank Group; The Wall Chart on

MDGs which provides summary data on the progress by

African countries towards attainment of the Millennium

Development Goals (MDGs); The African Statistical

Journal, produced bi-annually in collaboration with

UNECA, which provides research and policy analysis on

statistical issues in the African region; and Comparative

Output, Incomes and Price Levels in African Countries

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which provides highlights of the results of the 2005 ICP-

Africa round.

X. Establishment of institutions

At the continental level the African Development Bank has

also been instrumental in the establishment and promotion of

the following African institutions:

Africa Re-insurance Corporation;

Shelter Afrique;

Association of African Development Finance Institutions

(AADFI);

Federation of African Consultants (FECA);

Africa Project Development Facility (APDF);

International Finance Company for Investments in Africa

(SIFIDA);

African Management Services Company (AMSCO);

African Business Round Table (ABR);

African Export-Import Bank (AFREXIMBANK);

African Capacity Building Foundation;

Joint Africa Institute;

PTA Bank; Network for Environment and Sustainable Development in

Africa (NESDA);

Lead agency for NEPAD infrastructure development and

guide in the development of banking and financial stan-

dards as well as the strategic partner of the African Peer

Review Mechanism (APRM).

Y. AfDB information disclosure policy

AfDB Group Board of Directors approved the first policy for

public disclosure of information in 1997. The policy has been

revised three times in February 2004, October 2005 and

March 2012. Before 2012 the policy generally outlined a

positive list of types of information for disclosure as was pre-

valent in development partner institutions before 2010. On

the other hand the 2012 revised policy outlines a limited

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negative list, which presents a clearer presumption of dis-

closure by outlining the category of information or documents

the Bank Group will not disclose (i.e. negative list) so that

beyond this list, the general assumption is that all other docu-

ments will be disclosed.

The revised policy aims to maximize disclosure of infor-

mation on Bank activities with minimal limitations that

reflect the Bank Groups willingness to disclose informa-

tion; facilitate access and share information on the Bank

Groups operations with a broad range of stakeholders;

promote good governance, transparency, and accounta-

bility to provide leadership in these areas; improve on

implementation effectiveness and better co-ordinate the

information disclosure processes; give more visibility to

the Bank Groups mission, strategies and activities to its

stakeholders; support the Bank Groups consultative pro-

cess in its activities and stakeholder participation in the

implementation of the Bank Groups financed projects;

and ensure harmonization with other Development

Finance Institutions (DFIs) on disclosure of information.

List of restrictions on or exceptions to disclosure include:

Correspondence, uncompleted deliberative information,uncompleted reports , statistics and analysis for Bank

internal work and decision making processes and audit

reports; communication between Bank Groups

President and RMC , Governors and Executive Directors

without their prior authorization; legal, disciplinary or

investigative matters including bids and evaluation ofbids; financial information including borrowings, terms

and tranches of payment; Bank Group and individual

security and safety arrangements as well as personal

information including staff records, medical information

personal, e-mails that are not classified as public.

Responding to information requests: The Bank Group

undertakes to ensure access to information eligible for

disclosures through, among others, the Banks website,

the public information center (PIC), the regional resource

centers (RRCs), and the Field Offices. The Banks General

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Secretariat which acts as interface between Management

and the Boards of Directors and Governors, plays a key

role in the disclosure of Board documents, archiving all

Boards documents, including the responsibility for the

Banks electronic archiving, implementation of document

management policies etc. The Communications &

External Relations Unit also implements the Banks dis-

closure policy by using the website and intranet as infor-

mation dissemination platforms.

Z. AfDB long-term development strategy 2013-2022

Since 1977, decisions on the use of resources of the Bank

Group were made on the basis of successive operational pro-

grammes which indicate the priority sectors in line with the

Bank Group objectives to promote the economic develop-

ment and social progress of African countries. After two suc-

cessive medium term strategies 2002-2007 and 2008-2012,

a new operational programme is developed within the context

of a longer-term 10 year perspective based on the Banks

experience over the past four decades. The new strategy

envisaged wide regional consultations to synchronize the

Banks vision with that of Africa as a whole. Under the newlong term strategy, the AfDB will champion a vision that seeks

to position Africa realistically and boldly as a continent on the

rise, a continent that will strive to enjoy sustained, inclusive

growth as well as green growth. The Bank will seek to enhan-

ce private sector development with greater reliance on

domestic resources rather than external aid, supported byrobust public sector governance in capable states.

The consultation meeting in selected African capitals will

assist in identifying drivers of sustainable growth that will

constitute the pillars of inclusive growth in Africa. These pillars

will include cross-cutting factors such as gender equality,

higher education and scientific innovation, effective partner-

ships beyond the current ODA partners, information techno-

logy, new trade patterns that can improve global demand for

Africas natural resources and, above all, improved political

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and environmental governance etc. Other emerging strategic

pillars of the new strategy will also include climate change,

green growth, knowledge creation and sharing, regional infra-

structure and trade facilitation, private sector and human

capital development.

Annexes I

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Annexes


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Annex I

AfDB Group Annual Meetings and Major Events

1964 Lagos, Nigeria: Inaugural Board of GovernorsMeetings; Choice of Headquarters. Election ofMamoun Beheiry of Sudan as the Banks firstPresident.

1965 No Annual Board of Governors Meetings.

1966 Abidjan, Cte dIvoire: First meeting at the

Headquarters.

1967 Abidjan, Cte dIvoire: Review of initial operationsincluding equity participation in the NationalDevelopment Bank of Sierra Leone, and an interna-tional road project loan to Kenya.

1968 Nairobi, Kenya.

1969 Freetown, Sierra Leone: Re-election of the firstPresident of AfDB (Mr. Mamoun Beheiry).

1970 Fort Lamy (Ndjamena), Chad: Election of Mr.Abdelwahab Labidi as the second President of AfDB.

1971 Kampala, Uganda: Discussions on the establishmentof ADF.

1972 Algiers, Algeria: Approval of Draft Agreement estab-lishing ADF. Conference of 13 Plenipotentiaries ofState Participants to sign ADF Agreement in Abidjanin November 1972.

1973 Lusaka, Zambia: Decision to increase the AfDB capi-tal stock.

1974 Rabat, Morocco: Decision on the Second CapitalIncrease. ADF begins operations. Cumulative AfDBloan approvals stands at US$ 125 million.

1975 Dakar, Senegal: 2-3 May, Federation of African

Finance Institutions (AADFI) inaugural meeting.

1976 Kinshasa, Zaire: Election of Dr. Kwame D. Fordwor asthe third President of the Bank. Third increase of the

AfDBs capital stock.

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1977 Port Louis, Mauritius: Study on resource mobilization,including those of non-regional countries.

1978 Libreville, Gabon: Negotiations on the admission of

Non-Regional Countries.

1979 Abidjan, Cte dIvoire: Technical capital increaseahead of proposed equity participation of non-region-al countries. Opening of AfDB London Office.

1980 Abidjan, Cte dIvoire: Election of Mr. Wila D.Mung'omba as the fourth AfDB President.

1981 Lome, Togo: Board of Governors authorizes capitalincrease to US$ 2.5 billion.

1982 Lusaka, Zambia: Ratification of the opening of capitalto non-regionals completed. AfDB capital increasesto US$ 6.3 billion.

1983 Nairobi, Kenya: 17 non-regional members attendtheir first AfDB Group Annual Meetings as full mem-bers.

1984 Tunis, Tunisia: Establishment of Federation of AfricanConsultants (FECA). Deputies approve US$ 1.5 billionfor ADF-IV.

1985 Brazzaville, Congo: Election of Mr. Babacar Ndiaye asthe fifth President of the AfDB Group.

1986 Harare, Zimbabwe: 18-member Ad-hoc Committeeto study 200% capital increase (GCI-IV). Approval ofnon-project lending proposal.

1987 Cairo, Egypt: 200% AfDB capital increase .

1988 Abidjan, Cte d'Ivoire: Approval of US$ 13 billionlending programme.

1989 Abuja, Nigeria: 25th Anniversary celebrations.Committee of Ten Report on the AfDBs future.

1990 Abidjan, Cte dIvoire: President Babacar Ndiaye re-elected.

1991 Abidjan, Cte dIvoire: Review of the 1986-1991lending programme. Commencement of operationalconsolidation policy.

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1992 Dakar, Senegal: Appointment of Mrs. Abu-Affan asfirst woman Vice-President.

1993 Abidjan, Cte dIvoire: ADF-VII negotiations. Focus

on poverty alleviation, social dimension of structuraladjustment in Africa and appropriate country pro-gramming of lending.

1994 Nairobi, Kenya: 30th Anniversary celebrations. Themeetings were marked by the release of the KnoxReport on AfDBs future and a final decision on loanquality as well as re-organization of the Bank's struc-

ture.

1995 Abuja, Nigeria: Decision on limitation of the term ofoffice of Elected Officers and members of the Boardof Directors to two terms of three years, and that ofthe President to two terms of five years each.Presidential election deadlocked.

1995 Abidjan, Cte d'Ivoire: Extraordinary meeting of theBoard of Governors elected Mr. Omar Kabbaj as thesixth AfDB President on 26 August.

1996 Abidjan, Cte d'Ivoire: ADF-VII negotiations conclud-ed on USD 2.6 billion replenishment for 1996-1998period. A special fund of amounting to USD 420 mil-lion was established in Osaka by 16 StateParticipants as a supplement to the ADF-VII. Themeetings also registered the submission of Ad-hocCommittee report on institutional governance and theFifth General Capital Increase of the Bank.

1997 Abidjan, Cte d'Ivoire: Two African countries, SouthAfrica and Botswana, decided to contribute

resources to the ADF window..

1998 Abidjan, Cte d'Ivoire: Conclusion of meetings of theAd-hoc Committee on GCI-V and decision toincrease AfDB capital by 35%. Preliminary meetingon the replenishment of ADF-VIII held

1999 Cairo, Egypt: Launching of Bank Groups new Vision

Document identifying agriculture, private sector andhuman resources development as the main strategicareas for Bank lending activities. Annual MeetingsSymposium on Infrastructure for AfricasDevelopment. The Board of Governors approved the

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Joint Africa Institute of the AfDB, IMF, and WorldBank.

2000 Abidjan, Cte dIvoire: Extraordinary meeting of the

Board of Governors of the Bank Group. PresidentOmar. Kabbaj re-elected by acclamation for a secondfive-year term. The Bank announces the re-openingof five Regional and Country Offices.

2001 Valencia, Spain: First Annual Meetings outside Africa.Presidents John Kufuor of Ghana and JoaquimChissano of Mozambique attend as special guests.

Annual Meetings symposium on Partnership forAfricas Development. ADF-IX negotiations begin.

2002 Addis Ababa, Ethiopia: First Annual Meetings held inthe country, seat of the OAU/AU. Symposium on thetheme: Towards Realizing the Objectives of the NewPartnership for Africas Development (NEPAD).

2003 Addis Ababa: Annual meetings held back-to-backwith the UN Economic Commission for Africa FinanceMinisters meeting. Both sides held a joint symposiumon the theme: Poverty Reduction, SocialDevelopment, and the Millennium DevelopmentGoals in Africa: Are We Making Progress on theGround?

2004 Kampala: Uganda hosted the Annual meeting alsoheld back-to-back with the ECA conference of

African Finance Ministers meeting and a jointSymposium on the theme: Closing the Gender Gap:Promoting Gender Equality for Growth andDevelopment in Africa.

2005 Abuja: Inconclusive Presidential elections. Extra-Ordinary meeting scheduled for Tunis, 21-22 July2005. 1 July 2005, Mr. Donald Kaberuka beco