Switzerland and the African Development Bank Group (AfDB/AfDF/NTF) August 2015 1

SECO-SDC FACTSHEETMULTILATERAL ORGANISATIONSAugust 2015

SWITZERLAND AND THE AFRICAN DEVELOPMENT BANK GROUP (AfDB/AfDF/NTF)

FACTS AND FIGURES

MandateThe overarching objective of the African Develop-ment Bank (AfDB) Group is to spur sustainable economic development and social progress in its regional member countries (RMCs), thus contribut-ing to poverty reduction. The African Development Bank Group comprises three distinct entities under one management: the African Development Bank (AfDB) as well as two concessionary windows - the African Development Fund (AfDF), and the Nigeria Trust Fund (NTF). The AfDF and NTF provide support to the poorest regional member countries.

Type of organisationMultilateral development bank (owned by 80 share-holders – 54 African and 26 non-African countries)

Institution (AfDB)• Head of organisation: President Akinwumi Ade-

sina (Nigeria) from September 2015 elected for a five-year term.

• Headquarters: Abidjan (Republic of Côte d’Ivoire).• Number of country offices: 37 incl. 2 regional

resource centres and an external office in Tokyo (Japan).

• Number of staff (2014): 1932 (30% in field of-fices, i.e. 50% of operational staff).

• Established: AfDB in 1964 (since 1982 open to non-African members); AfDF in 1972 and NTF in 1976.

• Board: The Board of Governors is the supreme gov-erning body. Switzerland is represented through the State Secretariat for Economic Affairs SECO (Governor) and the Swiss Agency for Development and Cooperation SDC (Alternate Governor). In the Board of Executive Directors (20 seats), Switzerland is part of a constituency with Germany and Portu-gal, sharing with Germany the Executive Director and Senior Advisor position on a rotational basis.

Website: www.afdb.org

Switzerland’s contributions (in CHF million)

AfDB approved operations 2012–2014 (in CHF million)

AfDB/AfDF expenditure by focus area in 2014

0

5000

6000

3000

2000

1000

8000

20132012 2014

Special Funds

NTF

AfDF

AfDB

7000

4000

Energy

Water supply and sanitation

Transport

Finance

Agriculture

Social

Multisector

Industry

Environment

0

40

30

20

10

70

20132012 2014

AfDF

Capital AfDB

Trust funds

29%

6%

20%

11%

18%

8%

6%

1%1%

60

50

63.4%41.7%48.9%

4.8%

5.8%6.3% 0.2%

0.7%0.3%31.5%

51.8%44.4%

Switzerland and the African Development Bank Group (AfDB/AfDF/NTF) August 2015 2

2. Advance regional economic integration3. Facilitate private sector investment and support

entrepreneurship development4. Improve public governance by more inclusion and

accountability5. Promote the skills of the workforce, especially

by better training for young people

While implementing this ten-year strategy, special at-tention will be paid to fragile states, to gender equal-ity and to agriculture and food security. The operational priorities of AfDF-12 (2011–2013) – infrastructure, governance, regional integration and assistance to fragile states – are guided by similar objectives.

Results Africa is the second fastest growing continent of the world after Asia. There are large variations across countries and sectors. East Africa for example grew at 7.1 percent in 2014, compared to 4.7 percent in the previous year. Despite the persistence of conflict in parts of the West Africa region, the effects of the Ebola epidemic, and the sharp decline in oil prices, the region grew by 5.7 percent in 2013 and by 6.0 percent in 2014. Six African countries are among the top 10 global performers. The continent, however, remains sensitive to downside risks emanating from lower commodity prices, tightening global financial conditions, fiscal vulnerabilities, security and govern-ance issues and the lingering effects of pandemics, like the Ebola outbreak in parts of West Africa.The following examples illustrate the Banks contribu-tion to the positive development on the continent:

Regional integration and tradeThe AfDB is Africa’s principal financier of regional projects. For instance, the AfDB/AfDF financed the construction or rehabilitation of a total of 680 km of cross-border roads between 2012 and 2014. In this context, the AfDB is promoting “one-stop border posts” which provide border services at one coun-ter and it supports capacity building in customs op-erations. In combination, these investments facilitate the development of transport corridors linking land locked countries with ports and producers with con-sumers, i.e. stimulating sub-regional trade.

InfrastructureThe large investments from 2013-2014 improved the access to transport for more than 32 million people. In the area of water and sanitation, the AfDB/AfDF created drinking water capacity and offered train-ings for maintenance of water facilities. Hosting the Rural Water Supply and Sanitation Initiative (RWSSI) and the RWSSI-Trust Fund, the Bank also contributed substantially to improved water supply and sanita-tion in rural areas. These efforts were providing 4.2 million people with new or improved access to water and sanitation.The Bank is also focusing on addressing the ener-gy deficit. The largest energy project in 2014 was

Switzerland• Financial contribution:

• African Development Bank General Capital Increase 6 (2011–2018): CHF 48 million (Swit-zerland holds 1.48% of the AfDB’s capital)

• African Development Fund, 13th Replen-ishment (2014-2016): CHF 186 million (Swiss share of the replenishment: 3%).

• Number of Swiss staff (2014): 5• Mandates to Swiss firms in 2014: CHF 1.35 Mio.

AfDB/AfDF

MandateThe main objective of the Bank is to help reduce poverty, improve living conditions for Africans and mobilize resources for the continent’s economic and social development. The AfDB’s resources come from the subscribed shares of the authorized capital by its shareholders, from funds borrowed on the interna-tional capital markets based on the Bank’s “AAA” rating, from loan repayments and from income de-rived from Bank loans and investments. In contrast, the funds for the AfDF are replenished by donor countries every three years.Established in 1972, the African Development Fund (AfDF) is the concessional financing arm of the Af-rican Development Bank Group (AfDB). It promotes economic and social development through the provi-sion of concessional loans and grants to 40 low-in-come regional member countries that have no access to commercial bank loans. In addition to financial support for projects and programmes, the AfDF de-livers technical assistance, capacity-building activities and know-how.The AfDF is primarily financed by non-regional donor countries and from the regional countries Angola, Egypt, Libya, South Africa, but also by capital repay-ments of earlier loans. Contributions to the fund are made through replenishment negotiations tak-ing place every three years. Resources are allocated to recipient countries through a performance based allocation system including criteria such as good governance, gross national income per capita and population size. Since 2008, the AfDF has set asides specially earmarked funds for fragile states, regional operations and the private sector credit enhance-ment facility (PSF).

Long-term objectives The ten-year strategy of the AfDB, 2013–2022, com-prises two main goals: Achieve growth that is more inclusive and moving towards green growth that leads to poverty reduction and increases the ecologi-cal sustainability of economic development. To attain such “inclusive and green growth”, five operational priorities were defined:

1. Significantly increase investment in infra-structure

Switzerland and the African Development Bank Group (AfDB/AfDF/NTF) August 2015 3

SWITZERLAND

Switzerland became a member of the AfDB in 1982 and has been supporting the AfDF since its founda-tion in 1972. It increased its contribution to the AfDF-13 to 3% with a core contribution of about CHF 186 Mio. Switzerland participates in various bod-ies (Board of Governors, Board of Executive Direc-tors and various Board committees), through which it fulfils its oversight function as a shareholder and monitors and influences how the bank implements its strategy to fight poverty with concrete actions and measurable results. This includes assuring that the institution puts more emphasis on monitoring for development results and on assurance of quality.

Switzerland’s medium-term objectivesThe excellent working relationship within our constit-uency between Germany, Portugal and Switzerland allowed influencing strategic-, operational decisions and contributing to better country strategy papers.

As part of its development agenda, Switzerland’s medium-term objectives for the Bank are a stronger focus on fragile states and conflict contexts, promot-ing private sector development, reducing poverty, promoting gender equality and human development, climate change and green growth, as well as support-ing rural development and good governance.

Since 2010 Switzerland has made additional financial contributions to two multi-donor Trust Funds, the “Rural Water Supply and Sanitation Initiative Trust Fund” (RWSSI-TF) to which it contributed CHF 40 mil-lion so far and the “Governance Trust Fund” to which it contributed CHF 3 million for the years 2011-2013. By contributing to such thematic trust funds, Switzer-land is able to support the Bank’s cooperation in a specific sector in different African countries.

Results of Swiss cooperation with the AfDB/AfDFSwitzerland provides technical expertise and financial support to a number of units and trust funds of the AfDB/AfDF. Such interventions have led, among oth-ers, to the following results:

Sustainable Infrastructure DevelopmentSwitzerland wants to strengthen sustainable in-frastructure, especially in fragile states. Therefore, Switzerland contributed to ensure equal access to infrastructure services (particularly regarding gender and rural/urban), taking into account that large in-frastructure projects benefit local communities and have a transformational effect on the respective re-gion. This happened on the one hand by providing important contributions to the discussions related to the shift towards sustainable infrastructure de-velopment. On the other hand, Switzerland insisted on the need for adequate maintenance systems and financing. Switzerland has been actively engaged in

a power sector reform program in Angola that ex-pands access to electricity at affordable rates espe-cially to the rural communities, who comprise 45% of the countries’ population.

Private-sector developmentStrengthening legal and institutional frameworks to promote private investment and sound business climates are crucial to foster private-sector develop-ment. Beside this, supporting small-scale businesses and entrepreneurship is an effective approach to fight poverty and achieve inclusive growth. From 2012 to 2014, the AfDB/AfDF granted 311 credits for microfinance systems and trained clients in busi-ness management. An example is the Bank’s USD 12 million line of credit to Nigeria’s LAPO Microfinance Bank in 2014. For its 1.1 million clients, LAPO bank uses a group-lending model based on a communi-ty-insurance approach. It specializes in support for women, who comprise over 90 percent of its total client base.

Governance and transparencyIn May 2014, the Bank approved its second Govern-ance Strategic Framework and Action Plan (GAP II), 2014-2018. The strategy seeks to build strong, trans-parent and accountable institutions in regional mem-ber countries to enhance their capacity to deliver on the agenda for inclusive and sustainable growth. An example is the Mozambique Economic Governance and Inclusive Growth Program that aims to promote inclusive and sustainable growth by consolidating transparent and accountable public financial man-agement and improving the enabling environment for private-sector development in the country.

Skills and Human developmentThe first Human capital strategy, approved in 2014, defines priorities for the Bank to work on human de-velopment. In 2012-2014 more than 2 million people benefited from better access to education. In Tanza-nia, for example, the Technical Vocational Education, Training, and Teacher Education Project is expected to have a major effect on children and youth, espe-cially from rural areas.

Road construction in Madagascar © African Development Bank

Switzerland and the African Development Bank Group (AfDB/AfDF/NTF) August 2015 4

policy dialogue with Management, advocating for a consequent shift towards infrastructure projects with a focus on green energy and the integration of good governance measures, including capacity building and corporate development measures, as part of any infrastructure operation.

Case exampleRural Water Supply and Sanitation Initiative (RWSSI)On behalf of the African Union and the African Ministers Council on Water (AMCOW), the AfDB launched in 2003 the Rural Water Supply and Sanitation Initiative (RWSSI). This initiative aims at sustainably increasing the access to improved water supply and sanitation facilities in rural areas in Africa. Since its inception, 49 RWSSI programmes in 33 African countries were approved and imple-mented. The number of people served with ac-cess to improved water supply through the RWSSI programme rose from 1.15 million in 2007 to 97 million people at the end of 2014, while for sanitation it increased from 0.6 million to an es-timated 70 million people by end of 2014. The Bank’s RWSSI Strategic Plan 2012–2015 with an enhanced focus on governance and fragile states will be reviewed and revised during 2015.To leverage support, the AfDB established the RWSSI-Trust Fund in 2005. Canada, Denmark, France, Holland and Switzerland as main donors contributed so far about Euro 156 million to this Trust Fund. Since 2010, Switzerland contributed to the RWSSI-TF CHF 40 million. During the last years, Switzerland successfully influenced RWSSI’s focus on fragile states, on the Human Right for water and sanitation, and ensured an increase of new projects in countries in fragile situations.

Governance and AccountabilityFor the new Governance Action Plan II (2014-2018), Switzerland successfully promoted a stronger focus on fiscal decentralization and on strengthen-ing of parliamentary oversight, media and civil soci-

ety. Furthermore, during the last years, Switzerland enhanced governance and accountability within the Regional Member States of AfDB by contributing to the Governance Trust Fund (GTF). An independent evaluation was made to decide on the future strate-gic direction of a possible second phase of the GTF. In the area of natural resources management and in countries with fragile situations, Switzerland en-gaged in an active policy dialogue with the bank and promoted transparency and accountability. Switzerland is strongly engaged in assisting the Tran-sition Support Department (TSD) in its task to support countries in fragile situations. Besides a new partnership with TSD to develop and field test a new diagnostic tool to better assess fragility in individual countries and sub-regions as well as building capac-ity, Switzerland is funding since July 2015 a technical expert to its policy division. This expert is expected to assist the Bank in implementing the new Transition Support strategy 2014-2019.

AfDB/AfDF CHALLENGES

The Bank’s Ten Year Strategy set ambitious objec-tives and there is still room for improvement for the institution to ensure that its activities fully contribute to an inclusive growth and thereby reaching also the poorest and most vulnerable segments of the popu-lations. An effective support to African countries to a transition towards green growth has revealed to be challenging and the Bank under the leadership of its new President, Dr. Akinwumi Adesina, will need to put more emphasis on this area in order to reach its objective. From an institutional point of view, the main challenges of the Bank Group are the comple-tion of its relocation from Tunis to its headquarters in Abidjan, Côte d’Ivoire, and the continuation of its decentralization.

ContactSECO Multilateral Cooperation:info.wemf.cooperation@seco.admin.chSDC West Africa Division:deza-dao@eda.admin.ch

Rural water supply and sanitation in Burkina Faso © African Development Bank