50 years at the service of Africa 1964-2014

50 years at the service of Africa1964-2014

african growthand development

This book was prepared by the Complex of the Chief Economist of the African Development Bank to com-memorate the 50th Anniversary of the establishment of the Bank.

The production of the book was made possible by the overall supervision and leadership of the High-level Ed-itorial Committee chaired by the Acting Vice President and Chief Economist, Dr. Steve Kayizzi-Mugerwa.

The membership of the Committee included Bank staff and consultants who provided intellectual input, con-tent as well as editorial advice at various stages during the preparation of the book. They are:

Joel Serunkuma Kibazo, Director of the Communication and External Relations Department

Bakri Musa Abdul Karim, Division Manager, African De-velopment Institute

John Phillips, Lead Strategic Communications Adviser, Communication and External Relations Department

Jacqueline Odula, Program Coordinator, African Devel-opment Institute

Ekwow Spio-Garbrah, Consultant, Communication and External Relations Department

Dr Elfatih Shaaeldin played a seminal role in the col-lection of historical and contemporary material for the book. He also prepared its first draft.

The Directors of several organizational units of the Bank supported the idea of the book and encouraged their staff to contribute. In particular, the following played key roles:

Victor Murinde, Egal N. Roble, Felix Njoku, Louis Kouaku, Victoria Hughes, Adewale Shoewbi, Charly Andral, Henry Koyie Henry Mansaray, Karim Haddad, Pauline Akolo, Clement Babalola, Aymen Osman Ali, Monojeet Pal, Moez Chareddine, Cecil Nartey, Mas-samba Diene, Patience Kuruneri, Trevor De Kock, Pierre Van Peteghem, Benedict Kanu, Charles Lufumpa, Ous-mane Dore, Claude N’kodia, Veronica Giardna, Anna Bossman, Yousif Bashir Eltahir, and Elfateh Khalid.

Thanks are also due to the family of the late first Pres-ident of the African Development Bank, Mr. Mamoun Beheiry, who contributed some rare photographs and valuable historical

This book was prepared by the Complex of the Chief Economist of the African Development Bank to mark the 50th Anniversary of the establishment of the Bank.

The production of the book was made possible by the overall supervision and leadership of an Editorial Committee chaired by the Acting Vice President and Chief Economist, Steve Kayizzi-Mugerwa.

The membership of the Committee included Bank staff and consultants who provided intellectual input, content as well as editorial advice at various stages during the preparation of the book. They are:

Joel Serunkuma Kibazo, Director of the Communication and External Relations Department

Bakri Musa Abdul Karim, Division Manager, African Development Institute

John Phillips, Lead Strategic Communications Adviser, Communication and External Relations Department

Jacqueline Odula, Program Coordinator, African Development Institute

Ekwow Spio-Garbrah, Consultant, Communication and External Relations Department

Dr. Elfatih Shaaeldin played an important role in the collection of historical and contemporary material for the book. He also prepared its first draft.

The Directors of several organizational units of the Bank supported the idea of the book and encouraged their staff to contribute. In particular, the following played key roles:

Victor Murinde, Bernadette Kamgnia, Egal N. Roble, Felix Njoku, Louis Kouakou, Victoria Hughes, Adewale Shoboyejo, Charly Andral, Henry Mansaray, Karim Haddad, Pauline Akolo, Clement Babalola, Aymen Osman Ali, Pal Monojeet, Moez Chareddine, Cecil Nartey, Massamba Diene, Patience Kuruneri, Trevor De Kock, Pierre Van Peteghem, Benedict Kanu, Charles Lufumpa, Ousmane Dore, Claude N’kodia, Veronica Giardina, Alex Mubiru, Anna Bossman, Yousif Bashir Eltahir, and Elfateh Khalid.

Thanks are also due to the family of the late first President of the African Development Bank, Mr. Mamoun Beheiry, who contributed some rare photographs and valuable historical material.

May 2015 www.afdb.org

Designed and printed by Phoenix Design Aid A/S, a CO2 neutral company accredited in the fields of quality (ISO 9001), environment (ISO 14001) and CSR (DS 49001) and approved provider of FSC™ certified products. Printed on environmentally friendly paper without chlorine and with vegetable-based inks. The printed matter is recyclable.

Acknowledgements

Photocredits

p2 Dreamstime.com; © Kierran Allen

p8 Dreamstime.com; © Eduardo Lopez Coronado, © Liana Petrenko, © Smandy, © Joshua Wanyama, © Attila Jandi, © Joshua Resnick, © Hongqi Zhang (aka Michael Zhang), © Hongqi Zhang (aka Michael Zhang), © Canonman29, © Hongqi Zhang (aka Michael Zhang), © Surabky, © Anke Van Wyk, © Gabriel Robledo, © Savannah1969, © Szefei, © Malija, © Gillespaire, © Ferdinand Reus, © Shuttlecock, © Mimagephotography,

p9 Dreamstime.com; © Photographerlondon, © Mnsanthoshkumar, © A J Cotton, © David Snyder, © Paul Prescott, © Shannon Fagan, © Anke Van Wyk, © Martin Applegate, © Nyul, © Monkey Business Images, © Alextara, © Mark Sepple, © Katrina Brown, © Tomi Tenetz, © Surabky, © Shuttlecock, © Giovanni De Caro, © Smandy, © Vladgalenko, © Joshua Wanyama

p72 AfDB ; Theriault

p73 AfDB

p74-75 AfDB ; Hoel

p76-77 AfDB ; Potocki

p84 AfDB ; Potocki

p85 AfDB ; Potocki

92 AfDB ; Potocki

p93 AfDB ; Onukogu

p96 AfDB ; Borgarello

p100 AfDB

p101 AfDB ; Borgarello

p104 AfDB

p105 AfDB

p106 AfDB

p107 AfDB

p18-19 Dreamstime.com; © Anna Omelchenko

p26 Dreamstime.com; © Ritu Jethani, © Altaoosthuizen, AfDB ; Onukogu

p27 Dreamstime.com; © R S Vivek

p28-29 Dreamstime.com; © Kodym

p31 AfDB ; Theriault , Hoel , Fernandez

p32 Dreamstime.com; © Lcswart

p37 AfDB

p43 AfDB

p47 AfDB

p54 AfDB ; Potocki

p58 AfDB

p59 AfDB ; Fernandez

p62-63 istockphoto.com; © Peeter Viisimaa

p70-71 Dreamstime.com; © Daleen Loest

p110 AfDB ; Onukogu

p114 AfDB

p115 AfDB ; Potocki ; Hoel

p116-117 Dreamstime.com; © Dmitry Pichugin

p126-27 AfDB

p123 Dreamstime.com; © Redzaal

p125 Dreamstime.com; © David Snyder

p127 Dreamstime.com; © Ericsch

p128 AfDB ; Hoel ; Potocki

p128 129 AfDB

p130-31 AfDB

6

1964 2014

7

Africa:Many faces

One continent

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1964 2014

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The Bank’s Golden Jubilee is a momentous occasion for us all. 50 years is an important milestone for the African Development Bank, an institution that arose from the foresightedness of a handful of Africa’s leaders and civil servants in the early 1960s to become the great institution that we know today. I pay homage to Romeo Horton, the Committee of Nine, and all those moving spirits who founded this Bank. Without their dream of unity and cooperation, it would never have existed or prospered. I believe we have been faithful to their vision, as a dynamic institution, in a fast-moving continent, in a rapidly changing world.

From the beginning, the goal was to better the lives of the people of Africa. At no point have we ever lost sight of this endeavour. In fifty years of operations, our vocabulary has changed a great deal. It now includes words such as ‘fragile states’, ‘gender equality’, ‘private sector development’, ‘good governance’, ‘climate change’, and ‘inclusiveness.’ Yes, change has been the only constant, and the Bank owes its longevity to its capacity to move with the times.

In 1964, the Bank had 10 staff, 26 member countries, and a capital base of some US$ 370 million. Three years later, in 1967, it had launched its first three projects.

50 years later in 2014, it had 1900 staff, 80 member countries, and a capital base of US$ 100 billion.

In the last few years, the Bank has focused on Africa’s economic transformation. It sees itself as being at the centre of the transformation of a continent whose time has come. It is fully conscious of the need to become a nimble and responsive institution in order to help unleash Africa’s potential. Much of that work implies mobilising others: increasing our role as a knowledge generator and a knowledge broker, and above all enhancing our capacity to leverage resources to the content. Let me acknowledge and thank all the people and institutions with whom we have shared our journey. I thank our Member countries, in the form of our Boards of Governors and of Executive Directors. I thank our many development partners. Above all, I thank the management and staff of the Bank over the past five decades. I salute all those who have gone before, and all those who still carry the torch forward. We are thankful for your skills, your dedication, and your humanity.

Donald Kaberuka

PresidentAfrican Development Bank Group

Foreword

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African Development Bank 1964-2014 50 years at the service of Africa

The African Development Bank Group in figures

1980-1995: Going global

The African Development Bank Group presence in Africa

Offshoots and partners of the Bank

1995-2005: Revitalizing the Bank

To the 1960s: High hopes, great challenges

1964-1979: The formative years

The African Development Bank Group timeline

2005 and beyond: An enhanced franchise value

Bank projects

2014: the Bank returns home to Abidjan

Contents

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Preface

This book has been written to mark the 50th Anniversary of the founding of the African Development Bank in 1964. It aims to highlight some of the important landmarks in the history of the institution, while also recognizing the efforts of the many people who contributed to its establishment and subsequent development. We have tried to present some of the dynamism and resilience that have characterised the institution over five decades, and that continue to push its work forward.

This Golden Jubilee is an important landmark for the African Development Bank and the rest of the continent. The Bank grew out of Africa’s quest for solidarity and cooperation during the 1960s, and has become the pre-eminent development finance institution on the continent. It has gone through various stages in its life cycle. Still, the Bank remained faithful to the objectives set by its founders – promoting economic integration, reducing poverty and raising Africa’s standing in the world.

The Bank has since increased its resources many times over, embarked on projects and programs of increasing complexity, and provided technical assistance and policy advice to many regional member countries. It has become the partner of choice in promoting Africa’s development, with a large portfolio distributed across Africa.

In 50 years, there has been an exponential growth in the demand for the Bank’s financial support in a range of areas, including roads, energy, water supply, schools, new health facilities, ICT and other communication infrastructure, and governance and accountability in the public sector. The creation of the African Development Fund in 1973 and the Nigeria Trust Fund in 1976 expanded the institution’s resource base and led to the creation of the African Development Bank Group. Subsequently, the ownership of the Bank was extended to non-regional member countries, of which there are now 26.

The Bank, according to its clients and peers, has been innovative, flexible and able to evolve continuously to meet the changing needs of its regional membership. The past decade, in particular, saw the introduction of a Bank strategy that emphasized selectivity and focus, with emphasis on areas where the Bank has comparative advantage. The Bank has also sought to leverage its resources better to attract the private sector. Equally important has been the Bank’s emphasis on policy dialogue and sharing of knowledge with its clients, enabling countries to put their resources to the best possible use. From exclusive reliance on lending to finance projects in the past, the Bank Group now employs a wide variety of financing instruments that include loans, grants and partial risk guarantees.

With the launch of its Ten Year Strategy for 2013-2022, entitled “At the Centre of Africa’s Transformation”, the Bank has demonstrated its commitment to support the long-term growth of the continent. This will require further emphasis on regional economic integration, including support to power pools, regional transport and port services, as well as policy dialogue targeted at regulatory reforms and enhancing competitiveness. Above all, the Bank will seek to ensure that Africa’s growth is inclusive, while also increasingly paying due attention to the environment. This book is a brief narration of the Bank’s fifty years at the service of Africa, focusing on key moments in the life of the institution. During this time, Africa has undergone many economic and political changes, while its demand for financial as well as advisory services has expanded. The Bank will continue to respond to Africa’s needs in the decades ahead, undertaking internal reforms to ensure that it remains agile and relevant. We also hope that the book reveals something of that indomitable spirit on the continent that has inspired our efforts, and that will carry us forward for the years ahead.

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The African Development Bank Group

Regional member countries

Regional member countriesNon-regional member countries

Non-regional member countries

20

1964

MadagascarMay 1976

SomaliaOctober 1964

South AfricaDecember 1995

TunisiaOctober 1964

UgandaSeptember 1964

ZambiaSeptember 1966

ZimbabweJune 1980

NamibiaMay 1991

MalawiJuly 1966

MaliSeptember 1964

MauritaniaSeptember 1964

MauritiusJanuary 1974

MoroccoSeptember 1964

MozambiqueJune 1976

Sierra LeoneSeptember 1964

NigeriaSeptember 1964

RwandaJanuary 1965

São Tomé and PríncipeApril 1977

SenegalSeptember 1964

SeychellesApril 1977

TogoSeptember 1964

SudanSeptember 1964

SwazilandJuly 1971

TanzaniaSeptember 1964

AlgeriaSeptember 1964

ArgentinaJuly 1985

AngolaJune 1980

AustriaMarch 1983

BeninSeptember 1964

BelgiumMarch 1983

BotswanaMarch 1972

BrazilMarch 1983

Burkina FasoSeptember 1964

CanadaDecember 1982

BurundiOctober 1968

ChinaMay 1985

Cabo VerdeApril 1976

FinlandDecember 1982

Central African RepublicAugust 1970

FranceDecember 1982

KuwaitDecember 1982

LuxembourgMay 2014

NetherlandsJanuary 1983

NorwayDecember 1982

Egypt September 1964

Equatorial GuineaJune 1975

EritreaMay 1994

DjiboutiMay 1978

South KoreaDecember 1982

ChadAugust 1968

GermanyMarch 1983

ComorosMay 1976

IndiaDecember 1983

Congo (DRC)September 1964

ItalyDecember 1982

Congo September 1964

JapanFebruary 1983

PortugalDecember 1982

SpainMarch 1984

Saudi ArabiaDecember 1983

GhanaSeptember 1964

Gabon September 1972

GambiaJuly 1973

Guinea-BissauMay 1975

GuineaSeptember 1964

Côte d’IvoireSeptember 1964

KenyaSeptember 1964

LesothoJuly 1973

LiberiaSeptember 1964

SwedenDecember 1982

SwitzerlandDecember 1982

TurkeyOctober 2013

United States of AmericaMarch 1983

United KingdomApril 1983

CameroonSeptember 1964

DenmarkDecember 1982

South SudanApril 2015

LibyaJuly 1972

NigerSeptember 1964

EthiopiaSeptember 1964

Constituent Institutions The African Development Bank (ADB)The African Development Fund (ADF)The Nigeria Trust Fund (NTF)

Shareholders 54 African countries26 non-African countries

Mission To promote sustainable economic growth and reduce poverty in Africa

Authorized Capital, December 2014 US$ 97 billion

Subscribed Capital, December 2014 US$ 94 billion

Paid-up Capital, December 2014 US$ 7 billion

Callable Capital, December 2014 US$ 87 billion

Total Reserves, December 2014 US$ 4 billion

Approved Operations, 2014, of which 232 operations totalling US$ 7.3 billion (Bank Group)

LoansGrants

Equity ParticipationSpecial Funds

US$ 5.5 billion (84 operations) US$ 1.1 billion (98 operations) US$ 192 million (6 operations) US$ 354 million (39 operations)

Loan and Grant Approvals by Sector, 2014(Bank Group)

Infrastructure: US$ 3.62 billion (54.4 percent) Transport: US$ 1.33 billion (20.4 %) Water & sanitation: US$ 375 million (5.7 %) Energy: US$ 1.91 billion (29.3 %)

Agriculture & Rural development: US$ 707.51 million (10.8 %)

Education, Health & Social: US$ 540.53 million (8.3 %)

Finance: US$ 1.17 billion (17.9 %) Multisector: US$ 387.39 million (5.9 %) Other sectors: US$ 104 million (1.6 %)

Total Loan and Grants Approvals, 1967–2014 4185 loans and grants totalling US$ 103.11 billion

The African Development Bank Group is the continent’s largest development finance institution. It is also known as a regional multilateral development institution.

Its prime objectives are to mobilize financial resources to support sustainable economic and social development in Africa, and to support economic integration. To do this, the Bank raises funds from inside and outside the continent to finance development projects such as roads, hospitals and schools, agricultural projects and electricity.

The highest governing body of the Bank is the Board of Governors, whose members are 80 Ministers representing the Member Countries. It also has a resident Board of 20 Executive Directors who are elected to represent all the Bank’s shareholders. The Bank is headed by a President, who is the Chief Executive Officer of the Bank as well as Chair of the Board. The President manages the day-to-day business of the Bank and determines the functions, responsibilities and internal structure of its various organizational units. The President is elected for a term of five years by the Board of Governors and serves for a maximum of 10 years.

The African Development Bank Group in figures

2014

2322

1964

Cumulative Bank Group operations1967-2014 (in milion USD)

110 000100 00090 00080 00070 00060 00050 00040 00030 00020 00010 000

0

Bank

Group

in total

African

Developm

entB

ank

African

Developm

entFund

Nigeria

TrustFund

Cumulative Bank Group Loan and Grant Approvalsby Sector,1967-2014 (%)

30

20

10

0 Agriculture

Transport

Multisector

Finance

Education, H

ealth&

Social

Energy

Water &

Sanitation

Industry & M

ining

Com

munication

Other S

ectors

Approved Operations

Loan and Grant Approvals by Sector

<<

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HEADQUARTERS

FIELD OFFICES

REGIONAL RESOURCE CENTERS

CUSTOMIZED FIELD PRESENCE

BUJUMBURA

DAR ES SALAAM

KIGALIKAMPALA

NAIROBI

N’DJAMENA

YAOUNDE BANGUI

KINSHASA

ADDIS ABABA

KHARTOUM

JUBA

MAPUTO

PRETORIA

ANTANANARIVO PORT LOUIS

LILONGWE

HARARE

LUSAKA

CAIRO

ALGIERS TUNIS

RABAT

LIBREVILLE

ACCRA

SÃO TOMÉ

LOMÉ COTONOU

BISSAU

MONROVIA

BAMAKO

LUANDA

OUAGADOUGOU

DAKAR

FREETOWN

CONAKRY

NOUAKCHOTT

ABUJA

ABIDJAN

HEADQUARTERS

FIELD OFFICES

REGIONAL RESOURCE CENTERS

CUSTOMIZED FIELD PRESENCE

MAURITIUS

COMOROS

SEYCHELLESZANZIBAR

MADAGASCAR

MOZAMBIQUE

SWAZILAND

LESOTHO

MALAWI

ZIMBABWE

ZAMBIA

NAMIBIA

BOTSWANA

ANGOLA

SOUTH AFRICA

TANZANIA

KENYACONGO (DRC)

RWANDA

BURUNDI

SOMALIA

DJIBOUTI

ERITREA

UGANDA

ETHIOPIA

CENTRAL AFRICANREPUBLIC SOUTH SUDAN

GABON

CAMEROON

CONGO

NIGERIA

BENIN

TOGO

BURKINAFASO

GHANASIERRA LEONE

LIBERIA

COTE D’IVOIRE

GUINEAGUINEA BISSAU

GAMBIA

CAPE VERDE

SENEGAL

MAURITANIA

MALI

ALGERIA

MOROCCO

WesternSahara

CHADNIGER

SUDAN

EGYPTLIBYA

TUNISIA

SAO TOMEAND PRINCIPE

EQUATORIALGUINEA

The African Development Bank Group presence in Africa

24

1964

26

1964 2014

27


Inclusive growth

30

1964 2014

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Green growth

Fighting poverty, spurring economic and social development, and promoting trade between African nations and with other regions of the world.

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1964

The African Development Bank Group timeline 1962 1963 1964

1964

1965 1966 1967 1968 1969

1969

1970 1972 1975 1977 1979

Conference of Ministers established committee from 9 countries to prepare for the creation of AfDB

September 10: Birth of AfDBNovember 4-7: Board of Governors inaugural meeting in Lagos, Nigeria

Mamoun Beheiry (Sudan) elected 1st AfDB President

Bank members: 26

AFRICA300 million peopleUS$ 39 billion GDP Second oil price shock

Bank staff: 10

Bank loans/grants: US$ 2.3 million


Bank loans/grants: US$ 135.5 million1st General Capital Increase (US$ 206 million)

2nd General Capital Increase (US$ 556 million) ADF-I Replenishment of US$ 327 million (to 1978)

Bank loans/grants: US$ 519.9 millionADF-II Replenishment of US$ 712 million (to 1981)

Board of Governors 1st meeting in Abidjan

July: official start of operational activities

First Bank projects in Agriculture and in Water supply

Abdelwahab Labidi (Tunisia) elected 2nd President

ADF began operations

Kwamé Donkor Fordwor (Ghana) elected 3rd President

Goodall Gondwe (Malawi) Acting President

The Board of Governors approved in principle the admission of non-regional countries to the Bank’s membership

Negotiation with non-regional countries began

The Board of Governors approved establishment of the Nigeria Trust Fund

First Bank projects in Education and Health sectors

African Development Fund (ADF) created

First Bank projects in Power supply &in Finance

3rd meeting of Board of Governors approved first two Bank operations (in Sierra Leone & Kenya)

March: Headquarters opened in Abidjan, Côte d’Ivoire

In Khartoum, on 4 August, 23 states signed the Agreement Establishing the ADB

1964 1966 1967 1974 1976 1979

1979

1974 1976

1980 1981 1982 1983 1984 1985 1987 1988 1989

1989

1990 1991 1992 1994 1995 19971996

2000

Babacar Ndiaye re-elected for a second term

Appointment of Bodour Abu-Affan (Sudan) as first woman Vice President.

First Bank projects in Environment Sector

25th anniversary celebrations – Committee of Ten Report on the AfDB’s future

First Bank projects in Micro-Finance

17 Non-Regional Members attended their first AfDB Group Annual Meetings as full Members

South Africa and Botswana first African countries to contribute to ADF. Agriculture, private sector development and human capital development identified as new strategic sectors for Bank lending

Omar Kabbaj re-elected for a second term.

First Bank projects in urban development

Bank adopted new vision to promote economic growth with equity and poverty reduction as central goals

Donald Kaberuka (Rwanda) elected 7th Bank President.

Kaberuka established High Level Panel of 13 to prepare a framework for AfDB Medium Term Strategy of 2008-2012

Bank temporarily relocated to Tunisia because of growing political instability in Côte d’Ivoire

First Annual Meetings outside Africa in Valencia, Spain

Donald Kaberuka re-elected for a second term

AfDB celebrates its return to Abidjan, Côte d’Ivoire, after 11 years

Establishment of Regional Resource Centers in South Africa & Kenya.

Bank wins two US Treasury Development Impact Awards (projects in Uganda & Côte d’Ivoire)

Bank approved Ten Year Strategy (2013-2022) with the objectives of inclusive growth and transition to green growth.

3rd General Capital Increase (US$ 1.6 billion)


ADF-IV Replenishment ofUS$ 1.5 billion (to 1987)

4th General Capital Increase of US$ 22.3 billion (200% increase)

Approval of US$ 13 billion lending programADF-V Replenishment of US$ 2.8 billion (to 1990)

Bank members: 77Bank staff: 1100Number of operations (since 1967): 1291Bank loans/grants (1989): US$ 2.8 billion

ADF-VI Replenishment of US$ 3.4 billion (to 1993)

Bank loans/grants: US$ 1.4 billion

5th General Capital Increase of US$ 8.3 billion

Bank loans/grants: US$ 1.6 billionADF-VIII Replenishment of US$ 3.4 billion (to 2001)


ADF-XI Replenishment of US$ 8.9 billion (to 2010)


6th General Capital Increase of US$ 64 billion

ADF-XII Replenishment of US$ 9.5 billion (to 2013)

ADF-XIII Replenishment of US$ 7.3 billion (to 2016)

Bank members: 80Bank staff: 1900 Number of operations (since 1967): 4185Bank loans/grants (2014) US$ 6.5 billion

ADF-IX Replenishment of US$ 3.5 billion (to 2004)

ADF-X Replenishment of US$ 5.4 billion (to 2007)ADF-VII Replenishment of

US$ 3.2 billion (to 1998)Special fund of US$ 420 million established as supplement to ADF-VII

Willa Mung’Omba (Zambia), elected 4th President

Babacar Ndiaye (Senegal) elected 5th President

ADF-III Replenishment of US$ 1 billion (to 1984)

Omar Kabbaj(Morocco) elected 6th President

The United Nations adopt the Millennium Development Goals

AFRICA1,134 million peopleUS$ 2,477 billion GDP

Arab SpringInternational Financial Crisis

Africa’s population reaches 1 billion

1998 1999 2000 2001 2002 2003 2004 2005 2008

2008

2009 2010

2010

2011

2011

2012 20142013

2014

1981 1982 1984 1985 1987 1988 1989 1991 1994 1996 1998 1999 2002 2004 2005 2008 2009 2010 2012 2013 2014

AFRICA612 million peopleUS$ 495 billion GDP

The Bank began as an idea but has emerged as an important multilateral development organization.


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1964 2014

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The African Development Bank began as a hopeful idea, arising from the post-independence aspirations of African countries. Half a century later, it has emerged as Africa’s most successful expression of its goal of regional economic integration.

Before the 1950s, African countries – with the exception of Liberia, Ethiopia and Egypt – were either European colonies or, as in Southern Africa, living under apartheid. Independence changed the mood entirely, and there were hopes for rapid development. However, the post-independence years were dominated by state-led economic models, one-party states, and increasingly by military dictatorships. The Cold War that pervaded these years also limited the policy choices available to African leaders. Institutional weaknesses, corruption and poverty became entrenched. It seemed that less than a decade after independence, Africa’s socio-economic development was in reverse.

Besides, newly independent African countries faced numerous economic problems. They depended on a few primary commodities, mainly agriculture, and had weak export capabilities. Infrastructure was largely under-developed, and there was a serious lack of technical skills. High population growth was an additional burden, while weak government finances limited the ability to provide social services on a large scale. Rural-urban migration emptied the countryside of able-bodied youth, while shanty towns with inadequate access to utilities, including water and sanitation services, became a common feature of Africa’s cities.

1964: the birth of Africa’s BankThe journey towards the establishment of the African Development Bank began as early as 1958, at the four-day Tubman-Nkrumah-Touré Conference, named after the Presidents of Liberia, Ghana and Guinea, held in the village of Saniquelle in Liberia. In their final communiqué, the Presidents committed to do to everything in their power to speed up Africa’s independence and to develop institutions on the basis of continental solidarity.

Three other conferences – held in Accra in December 1958, Tunis in January 1960, and Cairo in March 1961 – solidified the idea of the African Development Bank. They explicitly called for the setting up of institutions for economic cooperation. In Tunis, the economic and social resolution stated that:

“Considering the under-developed state of the African countries, which was the result of the colonial system and foreign domination; considering the departmentalization and lack of harmony existing in the African economies and the inadequate technical cadres and finance; and considering that economic growth and development constitutes the surest guarantee of the freedom of the African countries…”, the participants proposed, “the creation by all African states, of a common organization for the conduct of finance and commerce, and centres of social and economic research.”

Following these meetings, the Liberian government proposed the setting up of an African Development Bank. Romeo Horton, a Liberian, was subsequently requested by his government to solicit support for the establishment of an African Development Bank. Following meetings with 16 African Heads of State, he reported that they were without hesitation committed to the creation of the Bank.

The proposal finally reached the UNECA Under-Secretary General, Mr. Mekki Abass, who submitted it to the Fourth Conference of the African Ministers of Finance, during their meeting in Addis Ababa in February 1961. The Conference adopted the proposal as Resolution 27 (III) on the need for an African development bank.

In March 1962, the Conference of Ministers established a committee from nine countries to undertake the preparatory work for the establishment of the Bank. The mandate of the Committee was to consult African and non-African governments, and to come up with recommendations on the financial and administrative structure of the proposed bank, including the amount of its authorized capital, and the means and terms of its financing from African or non-African sources.

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1962: the Committee of Nine at workThe first meeting of the Committee of Nine was convened in June 1962 in Monrovia, Liberia, in appreciation of the Liberian government’s role in initiating the proposal. The Committee set up delegations to visit African and non-African countries. Mr. Horton headed the delegation which visited Japan, the US and some eastern European countries. Mr. Mamoun Beheiry of Sudan led the delegation to Europe, taking in the Netherlands, France, West Germany and the United Kingdom.

While African countries showed strong support for the proposal, non-African governments and institutions were sceptical. They generally adopted an attitude of wait-and-see. But some countries and international financial executives were far from convinced. Others thought, not surprisingly for the time, that an African bank would add no value. The Committee of Nine delegates assured the sceptics that an African bank would complement rather than compete with existing international financial institutions, notably the World Bank. They argued that a viable African financial institution would enhance African unity and development by funding multilateral and continental projects.

Despite the cautious reaction from Western quarters, two prominent European economists backed the idea of an African bank. Sir Hans Singer, a renowned development economist within the United Nations system, and Professor Jan Tinbergen, a Dutch economist of note, were in full support of the project. Sir Hans suggested that Africa needed additional finances and additional technical power to cement its economic base. The existence of an African bank would add to the financial resources and technical support needed by African countries, but it would not replace the support being given by others. The continent’s needs were extensive. Professor Tinbergen, co-Nobel Prize Laureate in Economics, argued that the benefits of economic cooperation among African countries would be furthered by the proposed African bank.

September 1964: the Agreement coming into force In August 1963, the Committee submitted a comprehensive report to the Conference of the Ministers of Finance at its plenary session held in Khartoum. The Conference approved the Draft Agreement Establishing the ADB, and entrusted the Committee of Nine to carry out the preparatory work for the establishment of the Bank.

Twenty-three states signed the Agreement in Khartoum on 4 August 1963. Later on, eight more countries signed at the UN Headquarters in New York. The Agreement came into force on 10 September 1964.

The Agreement became the Charter of the Bank, which explained its purpose, functions, governance and organization. The Preamble of the Agreement partly echoed the motivation for the establishment of the Bank. It states that:

“The Governments on whose behalf the Agreement was signed were determined to strengthen African solidarity by means of economic cooperation between African states, and therefore agreed to establish hereby the African Development Bank with the objective of contributing to the sustainable development and social progress of the African member countries”. The Agreement restricted membership to independent African states. The initial authorized capital stock of the Bank was some US$ 370 million.

Minutes of the Committee of Nine

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November 1964: the inaugural meeting of the Board of Governors Following the entry into force of the Agreement Establishing the Bank, an inaugural meeting of the Board of Governors was held in Lagos on 4-7 November 1964. The main agenda items of the meeting were the choice of the headquarters, the election of the first president of the Bank, and the nomination of the members of the Board of Directors.

The meeting chose Abidjan, the capital of Côte d’Ivoire, to host the Bank’s headquarters. The decision was reached through consensus as an expression of geographical, linguistic and political balancing. Abidjan was also considered a suitable place for the new institution on several other grounds, including its status as a cosmopolitan city, its good infrastructure, and its accessibility to the rest of Africa and the world.

Mr. Mamoun Beheiry, a Sudanese national, was elected as the first President of the Bank for a five-year term from 1964 to 1969. An Oxford University graduate in Politics, Philosophy and Economics, he had had a distinguished career as a civil servant and governor of the Central Bank of Sudan, and been a member of the Committee of Nine.

1964

Two years after the inaugural meeting in Lagos, the Bank was ready for business. In 1967, the Board of Directors approved the first two operations of the Bank.

1964-1979: the formative years

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Following his election as President, Mr. Mamoun Beheiry spent a short period in Addis Ababa, benefiting from the human and physical infrastructure of the ECA and the OAU as he addressed the issues of establishing the Bank. The President subsequently moved to Abidjan in 1965 and officially inaugurated the Headquarters. Assisted by Vice Presidents, he embarked immediately on recruiting staff and following up on the subscriptions of the Bank’s capital.

Two years after the inaugural meeting in Lagos, the Bank was ready for business. In 1967, the Board of Directors approved the first two operations of the Bank. The first was an equity participation in the National Development Bank of Sierra Leone, and the second a loan to finance the construction of a road in Kenya.

The pace of approving loans was slow at the beginning. In addition, when requests for finance accumulated, management faced the reality of the meagre resources at the Bank. Between 1967 and 1973, the Bank only approved a handful of projects. This prompted its management to look for more resources on softer terms, and the efforts culminated in the establishment of two other windows of the Bank Group: the African Development Fund (ADF) and the Nigeria Trust Fund (NTF). Subsequently, the level of operations started to rise.

Installation at the new HeadquartersThe Bank offices were temporarily hosted by UNECA in Addis Ababa. One of the first tasks facing President Beheiry was the installation of the Bank in Côte d’Ivoire. President Félix Houphouët-Boigny was grateful for the selection of his country as the seat of the Bank, and was eager to help it settle in Abidjan. Beheiry wrote that “the tempo was slow, sometimes extremely slow, but patience and understanding helped and eventually matters moved”. After a short period of temporary accommodation at the building of the National Assembly of Côte d’Ivoire, the Bank soon moved to rented offices in the Noor El Hayat Building in the central business district of Abidjan. The opening of the headquarters in Abidjan took place in March 1965.

In the early days, Mr. Beheiry felt the growing political pressures on the institution. However, determined to resist these pressures, he set out to lay the foundations for an efficient and well-governed bank. He wrote that the financial constraints “should not overrule idealism, dedication, honesty and clarity of purpose, and the potential of qualifying as part of the mainstream of international financial institutions”. The President of the Bank saw his generation – the first post-colonial educated Africans – as having “a sense of service, of the inviolability and sanctity of public funds, of objectivity and honesty, clarity of purpose, commitment and promptness.”

The next challenge for the Bank’s senior management was to assemble an able cadre of African professionals. The Bank needed skilled Africans, not only to perform its core operational duties, but also to contribute to instituting the procedures and modalities of work. There was a need for a wide range of expertise in a number of areas but particularly in project management, economics, finance, accounting, and human resources. However, African countries at the time were short of such skills. The few trained and experienced individuals available were needed in their own countries to indigenize the civil service and the professional positions, which had formerly been held by colonial personnel. By 1970, the total number of staff in the Bank was 130, including support staff. Since the Bank was not paying competitively compared to other international agencies, there was a high turnover among its employees, some of whom quickly returned to their government jobs, or joined other organizations.

At senior management level, the Board of Governors had selected four vice-presidents, all of whom had held high positions in their home governments. They included Mansour Moala, an ex-Minister and the first Inspector of Finance in Tunisia; Ola Vincent, ex-Governor of the Central Bank of Nigeria; Louis Negre, ex-Governor of the Central Bank of Mali; and Aziz Al-Amoudi, a prominent Kenyan civil servant. A Pakistani economist, Mr. Latif Qureshi, was also recruited to assist in planning and resource mobilization.

The Board of Governors had already selected the members of the first Board of Directors of the Bank, some of whom were members of the Committee of Nine.

From the outset, the leaders of the Bank were conscious of the value of building partnerships with other African and UN organizations. There was also a strategic focus on strengthening ties with the two most important existing pan-African institutions, the OAU and the ECA.

In addition to several meetings with Robert Gardiner, head of the ECA, the President also held meetings with Diallo Telli, the first Secretary General of the OAU, and signed cooperative agreements with FAO, UNESCO and UNDP. The UNDP approved a grant of $500,000 to help with the challenge of housing Bank staff in Abidjan. The World Bank, which had set up an office in Abidjan, offered to accommodate the Bank in its early days. UNDP also provided the Bank with technical assistance through financing the establishment of a “Pre-investment Unit”. FAO and UNESCO seconded staff to the Bank. USAID, Canada, the Netherlands and Belgium provided technical assistance support in the area of project appraisal.


Mamoun Beheiry Sudan

PresidentNovember 1964 to August 1970

Abdelwahab Labidi Tunisia

PresidentAugust 1970 to May 1976

Kwame D. Fordwor Ghana

PresidentMay 1976 to July 1979

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By the end of 1970, the Bank’s total

commitments to development projects

amounted to aboutUS$ 24.4 million

African Development Bank 1964-2014 50 years at the service of AfricaTransport

From economic growth … to economic transformation

Building & rebuilding for today …. looking ahead to the needs of tomorrow

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1966: operations kick offThe official start of operational activities was July 1966, and the first approval of a project by the Board of Directors was made in 1967. The Bank approved an equity participation in the National Development Bank of Sierra Leone and extended a loan of US$ 2.3 million to the Government of Kenya to finance a road project. In 1968 and 1969, six more projects were approved, for a total of US$ 11.51 million. The countries that benefited from these projects were Burkina Faso (then Upper Volta), Kenya, Liberia, Malawi, Mali, Morocco, Tunisia, Sierra Leone, Uganda. There were also two equity participations in the East African Development Bank, and the National Development Bank of Sierra Leone. By the end of 1970, the Bank’s total commitments amounted to about US$ 24.4 million.

Several factors contributed to the slow start of operations. First, the process of establishing the ADB was slow: it took two years. Second, in the first few years the Bank could not find viable projects to finance. Since the establishment of the Bank was based on the need to fill Africa’s financial resource gap, the lack of good projects presented it with a real challenge.

In 1970, the Bank’s President was re-elected for a second term. However, he resigned two months into his second term of office, apparently because of a disagreement with the Board on organizational issues. Vice President Abdelwahab Labidi, a Tunisian national, was tasked to act for a five-month period. In 1970, at the Bank’s Annual Meeting held in Fort-Lamy (now N’Djamena) in Chad, Mr. Labidi was confirmed by election as the Second President of the Bank for a five-year term.

Early in his presidency, Mr. Labidi set a lending target of US$ 25 million per year over three years. The target was met. The Bank intensified its contacts and search for business and got more project proposals. From 1971 to 1973, the ADB approved 16 new projects, amounting to a total commitment of about US$ 105 million. The plan was to continue extending loans, with special focus on the six Sahelian countries: Burkina Faso (formerly Upper Volta), Chad, Mali, Mauritania, Niger, Senegal. The second priority level was a group of other poor countries including Benin (formerly Dahomey), Botswana, the Central African Republic, Lesotho, Malawi, Sierra Leone, Somalia, Sudan, Swaziland, and Tanzania. The Sahelian countries were hit hard by drought and required both humanitarian assistance and long-term financing to improve their food security. The whole continent was also subjected to strong external pressures because of the oil price shocks in 1973 and 1979.

While Africa’s need for financial support increased, practically all the Bank’s resources had been committed by the end of 1973. Furthermore, some member countries had not paid their capital subscriptions. Faced with these difficulties, the Bank was obliged to solicit for special funds from non-African countries. The Bank Agreement allows it to establish special funds if authorized by the Board of Governors.

In the early years, the Bank supported regional organizations such as the East African Development Bank, the Mano River Union, CEAO and ECOWAS. It also assisted in the establishment of Africa Re-Insurance in 1976. In 1969, the Bank helped establish the Societé Internationale Financière pour les Investissements et le Developpement en Afrique (SIFIDA). It then also financed the construction of Régie du Chemin de Fer Abidjan-Niger in 1972, the Mano River Bridge in 1973, and the Societé des Ciments d’Afrique de l’Ouest in 1975.

1973-1976: the Bank opens two new windowsThe idea of creating special funds first surfaced in 1966, when the ADB forwarded a proposal to 27 countries outside Africa for a multi-national Special Fund. The Bank’s approach to the non-African countries was endorsed by the Board of Governors at their third meeting, which took place in August 1967. The role of an African development fund would be to establish a ‘soft’ window for lower income countries.

The African Development Fund was formally inaugurated at the ninth Annual Meetings of the Bank in Lusaka in July 1973. The Fund began operations on August 1, 1973 and provided its first loan in January 1974. Initially, all African member countries were eligible to access ADF resources, with priority given to the poorest countries.

In 1975, the Nigerian government expressed its interest in providing resources to the “less favoured” African countries. Consequently, in April 1976 the Board of Governors adopted the Agreement Establishing the Nigeria Trust Fund (NTF).

The purpose of the NTF is to assist the development efforts of the ADB members, particularly low-income countries, by extending loans on softer terms than the conventional terms of the ADB. In particular, the NTF Agreement maintains that the resources of the Fund should be devoted primarily to long-term project financing in the fields of agriculture, including livestock, fishery, forestry, health, transport, water supply and other areas. It also emphasized projects that benefit more than one country.

The establishment of the ADF and the NTF led to a significant increase in the Bank Group’s lending in the 1970s. Additionally, the Bank Group, the parent institution, was able to secure a US$ 65 million loan in 1975 and floated bonds in Kuwait and on the Eurobond market in 1976. Cumulative lending between 1971 and 1980 was approximately US$ 2,510 million, with a yearly average of US$ 250 million.

By the end of the 1970s, the three windows of the Bank Group – the ADB, the ADF and the NTF – were well established and functioning. The next chapter traces the opening up of the capital of the Bank to non-African countries. 1979

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African Development Bank 1964-2014 50 years at the service of AfricaEnergy


Meeting today’s needs … re-imagining the energy supply of the future

The decision to open the Bank’s capital to non-regional states improved the Bank’s capital structure and the resources available for operations.


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During the 1980s, most of the African countries, which constituted ADB’s borrowing clients, faced serious economic difficulties. The two oil price shocks of 1973 and 1979 had great adverse impact on African economies, and these price shocks persisted up to the 1980s. The subsequent global recession adversely affected commodity prices for African producers. The volatile exchange rates and high interest rates throughout the 1980s caused serious debt servicing difficulties, and led to defaults in repayments by developing countries, many of them in Africa.

Mr. Wila D. Mung’omba was elected fourth President in 1980, following a caretaker Presidency of six months by Mr. Goodall Gondwe of Malawi. During Mung’omba’s period in office, Africa’s economic difficulties were exacerbated by prolonged periods of drought and slow growth. These circumstances pushed African countries towards seeking external resources, and eventually the Bank decided to open its capital to non-African members. Towards the mid-1980s, many African countries started to make adjustments in their economies to meet the economic challenges. The Bank, too, had to respond to the emerging economic situations by amending its lending policies to provide financial assistance to help its Member Countries.

In 1985, Mr. Babacar N’diaye of Senegal was elected fifth President, and would subsequently be re-elected for a second term in 1990. President N’diaye’s record included the expansion of the Bank’s lending capacity and the setting up of a unit for funding private sector operations. He was also instrumental in the establishment of a number of initiatives including Shelter Afrique, AFREXIMBANK and the Africa Business Forum, and in increasing the Bank’s equity participation in general. President N’diaye also appointed Mrs. Badour Abu Affan as the first female vice president for operations, reflecting his commitment to bridging the gender gap.

More members in the queueThe establishment of the ADF opened the door for non-African countries to become partners of the Bank Group. However, these countries were still not shareholders of the Bank. Since its inception in 1964, there had been hot debate among African countries over the idea of admitting non-regional countries to the membership of the Bank. At the time it seemed like a reversal of their newly-earned independence.

It was also evident that, with its limited capital base, the Bank would not be able to borrow money from the international markets at favourable rates. The weak economic situation of its African member states made it even more difficult for the Bank to have a strong financial position in these markets. Eventually there was almost universal agreement that the Bank would not meet Africa’s financial needs unless more resources were mobilized.

In 1977, the Board of Governors approved in principle the admission of non-regional countries to the Bank’s membership. The management of the Bank – under the Presidency of Dr. Kwame Fordwor of Ghana, who had been elected in 1976 – engaged in prolonged negotiations over the admission of the non-regional countries. However, the Agreement Establishing the Bank was only amended in 1982, to admit the non-regional members.

The admission of the non-regional countries helped to improve the financial position of the Bank, and consequently its rating by international financial markets. The ADB is rated by four major international rating agencies to determine its creditworthiness. The opening up of its capital also required the Bank to adhere to sound financial management principles and to commit to high quality operations, and to prove to the rating agencies - as well as to its members - that its resources will be put to good use.

Wila D. Mung’omba Zambia

PresidentJune 1980 to May 1985

Babacar N’diaye Senegal

PresidentMay 1985 to August 1995

1995Mrs. Badour Abu AffanSudan

First female vice-president of operations

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Offshoots and partners of the BankThe African Development Bank has established, or invested in, a number of key organisations working in the service of African development

They include:

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African Legal Support Facility (ALSF)

PTA Reinsurance Company (ZEP RE)

African Capacity Building Foundation

Africa Trade Insurance Agency (ATI)

African Business Round TableNetwork for Environment and

Sustainable Development in Africa (NESDA)

Africa Reinsurance Corporation

Shelter Afrique

African Export-Import Bank (Afreximbank)

Federation of African Consultants (FECA)

Federation of African & Arab Consultants (FCAA)

Africa Guarantee Fund

Association of African Development Finance Institution (AADFI)

African Water Facility

PTA Bank

Banque Ouest Africaine de Développement (BOAD)

African Management Services Company (AMSCO)

Banque de Developpement des Etats de l’Afrique Centrale (BDEAC)

The Infrastructure Consortium for Africa

K-REP Bank

With the entry of new shareholders and General Capital Increases the Bank’s

authorized capital increased from US$ 1.6 billion in 1981 to US$ 6.3 in 1983.

In 1987, the capital increased 200% to reach

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US$ 22.3 billion

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African Development Bank 1964-2014 50 years at the service of AfricaWater


Giving access to clean water for everyone … setting up long term water resources management

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New picture

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African Development Bank 1964-2014 50 years at the service of AfricaGovernance


Building government capacity … delivering quality services for citizens

Country programming was enhanced by selective and well-targeted macroeconomic and sector analyses, as well as policy and institutional assessments for individual countries.

1995-2005: revitalizing the Bank

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1995-2005:revitalizing the Bank

Omar KabbajMorocco

PresidentAugust 1995 to August 2005

In 1995, Mr. Omar Kabbaj was elected sixth President of the Bank. President Kabbaj, a Moroccan national, served two terms between 1995 and 2005. He came to the presidency with years of experience as a Minister and as a staff member of the World Bank and the IMF.

At the operational level, Mr. Kabbaj was confronted with two major challenges at the beginning of his term of office. First, a number of African economies were in difficulties, and this had led to an arrears problem at the Bank. Second, the performance of the Bank’s portfolio had worsened, partly as a result of financial difficulties suffered by some of the borrowing countries, and partly because of poor project design and implementation. The incoming President also faced the challenge of restoring the Bank’s credibility and its standing on the international financial markets. He also had to adapt the Bank’s operations to the changing needs of clients, as well as to respond to an evolving development agenda.

The early 1990s was a difficult period for the Bank. Africa’s growth performance was poor. African countries had serious debt servicing problems, with 29 of them considered as heavily indebted. As a result, more countries were not able to repay the Bank for their outstanding loans. The countries which were rated as high risk and severely indebted held US$ 7.5 billion of the Bank’s outstanding loans – or over 75% of its portfolio. The amount of non-performing loans rose from US$ 105 million in 1989 (3.1% of the total) to US$ 950 million in 1993 (11.4%).

An important development in the membership structure during the Kabbaj presidency was that South Africa became a member of the Bank Group.

Among the important governance reforms during Kabbaj’s presidency was the restriction on the number of times the President and Members of the Board of Directors could be re-elected. Additionally, the President was empowered to reform procedures for the selection of staff and senior managers, including the Vice-Presidents. The Bank also undertook a major organizational reform in 1996. This was subsequently expanded in 2002. The objective was to re-establish the credibility of the Bank and restore external confidence in it.

Other measures included strengthening the Bank’s sanctions policy on borrowers who fail to pay their outstanding loans. In addition, enhancing the quality of operations required attention at all phases of the project cycle. Other major issues that received attention included the strengthening of the Bank’s country focus by establishing country teams, aligning the Bank’s interventions with the development priorities of the countries, improving the quality-at-entry of projects, as well as the monitoring and evaluation of projects.

Country programming improved through enhancing analytical work, especially by looking more closely at the policy and institutional setting of the individual countries. The preparation of country studies and reports, particularly the Country Strategy Papers, was greatly enhanced, emphasizing the use of country systems and harmonization with other donor agencies.

In 1999, the Bank adopted a new vision aimed at promoting economic growth, with equity and poverty reduction as central goals. To this end, Bank resources would target four operational areas: agricultural and rural development; human resources development; private sector development; and good governance. The Bank would put the vision into action by adopting the 2003-2007 Strategic Plan.

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In 1999, the Bank adopted a new

vision aimed at promoting

economic growth, with equity and

poverty reduction as central goals.

1995-2005:revitalizing the Bank

2003: a strategic retreatBecause of the growing social and political instability which started in late 1999 in Côte d’Ivoire, the Bank’s host country, it was forced to relocate to Tunisia. It was the first and only MDB which had to abandon its headquarters in this manner. When the risk of political instability was evident, the Bank adopted a plan to ensure business continuity. The core objective of the plan was to minimize disruption to Bank operations, while maintaining the safety of its staff.

The Temporary Relocation Agency for the Bank in Tunis was well prepared to accommodate staff and management. Within three months, almost all staff had arrived and settled in Tunis. The successful relocation of the Bank was a unique experience, widely regarded as a testimony to the resilience and vigilance of staff, management and the Board. Ultimately, the business of the Bank was only minimally disrupted. Still, staff had to adopt to a new work environment, at the time when the Bank was expanding its operations.

2005

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African Development Bank 1964-2014 50 years at the service of AfricaEducation


Ensuring access to education for all … creating jobs for all

The Bank’s effectiveness has been strengthened by greater country ownership and donor harmonization.

2005 and beyond: an enhanced franchise value

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Donald Kaberuka Rwanda

PresidentSeptember 2005 to present (2015)

Donald Kaberuka, a former Minister of Finance of Rwanda and Governor of the Bank, assumed office as seventh President in September 2005. He was re-elected for a second term in 2010.

Kaberuka’s period at the Bank coincided with a fast changing situation in Africa. Most countries had embarked on the agenda of economic growth, but strategic choices needed to be made in light of limited resources. His tenure witnessed the financial crisis which struck in 2008 and peaked in the following two years, and the “Arab Spring” that started in 2010, and which seriously affected some of the Bank’s largest shareholders in North Africa – Tunisia, Libya and Egypt. Thus, although Africa had witnessed good growth numbers from the early 2000s – much above the average of the previous decades – the crises threatened to unwind the progress made thus far. In both cases, the Bank unrolled a massive countercyclical response, securing finances for countries and using approaches that it had never before deployed, such as liquidity support and trade finance. The Bank was able to mount its largest ever General Capital Increase in 2010, raising its capitalization by 200 percent to US$ 100 billion.

Selectivity and focus became the differentiating features of the reforms introduced by Kaberuka during his ten years at the helm of the Bank. Above all, his paradigm was: “the Bank cannot do everything”. He put emphasis on infrastructure, economic integration and the private sector (operations in the private sector multiplied ten times). He also pushed for far-reaching decentralization of Bank operations. The Bank also reinforced its internal accountability and transparency mechanisms to improve efficiency and boost professional standards.

With his experience from Rwanda, President Kaberuka championed the Bank’s own approach to addressing fragility in Africa. He is also recognised for giving real meaning to the concept of the Knowledge Bank. Because of this commitment, the Bank has been able to brand itself not only as a financing institution but also as a knowledge broker.

Kaberuka combined his work at headquarters with frequent trips to the field to visit Bank projects, in over 50 countries. Kaberuka returned the Bank to its Headquarters after 11 years in Tunis.

US$ 60 billion

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From 2005 to 2014, Bank Group lending

totaled some

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African Development Bank 1964-2014 50 years at the service of AfricaHealth


Strengthening capacity to deliver health services … bringing a better life for all

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Raising the barDuring Kaberuka’s first tenure in office, the Bank’s work was guided by the Medium Term Strategy, 2008-2012. This was a compact that arose from a long process of internal and external consultations led by a High-Level Panel of prominent personalities, which was set up by the President. Its thrust and momentum was extended and modified to form the Bank’s Ten Year Strategy 2013-2022, which depicts the Bank as being ‘at the centre of Africa’s transformation’. This new strategy, in many ways an enhancement but not a departure from the previous one, was a response to the broad need among Bank clients to ensure that the growth that they were beginning to see on the continent would be inclusive as well as sustainable. Hence, also, the importance of transitioning to a greener economy.

The Bank’s approach is to preserve its focus on areas where it has comparative advantage and which remain relevant for its development agenda: infrastructure, regional integration, governance and accountability, private sector development, and technology and skills development. Moreover, the Bank also identified areas deserving special emphasis, including food security, gender and the environment.

During Kaberuka’s term, the Bank’s witnessed a marked increase in its financial resources. Its capital saw a 200% increase during the Sixth General Capital Increase in 2010. This made it possible to scale up operations and to begin to finance the continent’s structural transformation, including by embarking on game changing mega-projects in middle and low-income countries. The increased resources boosted Bank lending. From 2005 to 2014, Bank Group lending totaled some US$ 60 billion, which was greater than the total loans and grants from the first four decades of operations.

The African Development Fund has also increased in importance as a source of financing for Africa’s low income countries. Donor countries provided some US$ 7.3 billion in the 13th replenishment of the Fund for the period 2014-2016. The Bank has also been able to mobilize support from a host of other agencies and countries, in the form of trust funds or direct participation in Bank projects and activities, to leverage its own resources, thereby enabling a broader impact.

Inclusive growth The Bank Group has sought to become a key instrument for assisting African countries on their march to structural transformation. It insists that in the course of becoming more affluent societies, they should also become more caring. No one should be left behind. Exclusion serves to make some groups better off than others, but ultimately breeds broad dissatisfaction, internal conflict and a reversal of any development gains achieved thus far.

While there is no template for ensuring success in the pursuit of inclusive policies, the Bank’s work and the experience of countries is beginning to highlight the main tenets. They include empowering people by improving their access to the factors of production, involving them in gainful employment, and creating economic opportunities through capacity enhancements that are relevant for the modern times, often influenced by technology and ICT revolutions.

Inclusive growth should also ensure access to social services, including health and education, female empowerment and non-discrimination with respect to the opportunities, especially in schooling, available equally to boys and girls. It must also be borne in mind that regional disparities, in many countries, including urban-rural disparities, are a threat to future growth and prosperity which must be addressed. The Bank is therefore careful to ensure that its programming documents, as well as its lending instruments, are taking the issue of inclusive growth into consideration.

Fragility: a concern for us allIn spite of Africa’s recent achievements, a quarter of its population of close to one billion resides in countries and situations characterized by varying forms of social and economic fragility. They are caused by a combination of poverty, conflict and adverse weather patterns. Addressing fragility and building resilience is thus a major pre-occupation of the Bank and has received further impetus during Kaberuka’s period in office.

A key concern of the Bank’s approach is that programs to address fragility should not be designed in the same way as those for normal countries: they require speed of delivery, innovation in design and a multi-sector approach in delivery, often involving the private sector. It is also important to understand the drivers of fragility, through commissioning studies that provide a good analysis of the political economy of the affected countries and regions. Above all, the Bank has devised a policy framework for its work in conflict affected countries. It argues that fragility knows no borders and must be given adequate attention using a range of national and regional institutions and instruments. Central to addressing fragility is the systematic application of a ‘fragility lens’ to identify, respond to and prevent fragility and to build resilience.

Food security Inadequate food security in many African countries has compounded their economic fragility, and also negatively affected the status of women, who are the main food producers in Africa’s low-income countries. Ensuring adequate food production is therefore a strategic necessity for countries, and an area on which the Bank has focused considerable effort in recent years through policy support and the provision of auxiliary infrastructure.

In recent years, the Bank has financed several projects to improve food security in Africa, because it relates closely to the reduction of fragility by increasing rural household incomes and welfare, and thereby empowering women in the countryside. The projects have included those in water management, tree planting, forestry and rehabilitating water facilities for people and for their livestock. Other projects have included building dams to support irrigation development, and helping farmers reach markets through the construction and maintenance of rural roads.


At the national and regional levels, food security depends crucially on efficient pricing mechanisms, functioning regional transportation networks and predictable government policies for the agricultural sector. Besides these projects, the Bank has also provided policy advice and contributed to capacity building.

Investing in gender equalityThe Bank has pursued a two-pronged approach to gender: ensuring that its own internal structures and processes show demonstrable concern over gender equality; and ensuring that its projects and programs are equally sensitive to gender issues. In 2010, the Bank created a Gender Division, as a first step in institutionalizing gender mainstreaming and the promotion of gender equality in the Bank, its projects and policies, and among regional member countries. This had a positive impact on operations, with the percentage of newly approved projects that were rated as having mainstreamed gender in a satisfactory manner increasing from 38% to 67% in the following two years.

In 2012, the Bank Group won the prestigious United States Treasury Award for development impact for a project in Côte d’Ivoire that was designed to address gender based violence in a post-conflict environment. In 2013, President Kaberuka appointed a Special Envoy on Gender as another important step in raising gender issues to the very top of the Bank’s agenda.

The Bank’s Gender Strategy for the period 2014-2018 underlines gender equality and mainstreaming as an important element of Africa’s transformation. The strategy has three areas of emphasis: enhancing the legal status and property rights of women; raising the economic empowerment of women; and underlining the important roles of knowledge management and capacity building in the process.

The infrastructure imperativeThe African Development Bank is sometimes called the “infrastructure bank”. This is an apt description given the emphasis that it has put on expanding Africa’s economic infrastructure in the last 50 years. Indeed, the Bank’s very first operation in 1967 was a road project in Kenya that cost US$ 2.3 million. Today, the Bank invests some US$ 5 billion in infrastructure each year.

Power and transport have received the bulk of resources targeted at infrastructure in recent years. Between 2011 and 2013, the Bank financed a number of projects for power generation, transmission lines and national and regional grids. In just under three years, it supported projects generating some 980 Mega Watts of electricity, benefitting an estimated 9 million people and connecting about 16,000 households. It has also helped to increase Africa’s rate of rural electrification from a coverage of 20% in the late 1990s to about 30% today. In transport, the Bank has been crucial to developing transport corridors in Southern Africa and boosting regional interconnection in West Africa. It is also supporting the reconstruction of the East African Railway, as well as regional ports and harbours, notably Namibia’s Walvis Bay.

Perhaps less known is the effort that the Bank has put into connecting Africa via ICT and related communication technologies in recent years. When the Bank was formed 50 years ago, the ICT sector did not exist. However, it was quick to identify the opportunities in the sector for growth and private sector development and, notably, how ICT could help alleviate the connectivity constraints of the countries.

Above all, infrastructure development has provided a good platform for broad collaboration between the Bank and other development partners, the private sector and regional agencies. The concept of public private partnerships has received prominence in recent years as a good model for expanding infrastructure provision. The construction of the Bujagali and Itezhi-Tezhi hydro power stations (in Uganda and Zambia respectively), demonstrate public private partnerships in action, including for the power transmission lines. A number of actors including governments, donors and equity funds teamed up to finance this much needed infrastructure. It would have been much harder if governments had to do it alone.

There has also been similar collaboration with respect to water, sanitation, and hygiene. The Bank is the host of the African Water Facility, funded by donors, which has co-financed a range of water and sanitation projects in the past decade. Considering the role of women and girl children in collecting water in low-income countries, improved water provision has greatly improved their livelihoods in the countries where these projects have been completed. Moreover, water projects play a critical role in health and social welfare achievements, food security, and income generation.

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African Development Bank 1964-2014 50 years at the service of AfricaPrivate sector


… boosting national economies Raising skills & incomes for families & communities

The private sector generates 2/3 of Africa’s investment,

3/4 of its economic output, and 9/10 of its formal and

informal employment. The Bank’s private investment

operations have increased nearly tenfold since 2000,

from US$ 250 million in 2005 to US$ 2 billion in

20122014

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African Development Bank 1964-2014 50 years at the service of AfricaAgriculture


… building agribusinesses that supply regions and beyond Meeting basic food needs

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The smooth return of the Bank to its

Headquarters in Abidjan was testimony to the

resilience of its staff and management, and the ef-

fective support of the Tunisian and Ivorian

Governments.

The private sector as driver In the past, African governments had an antagonistic relationship with the private sector, seeing it in some cases as an agent of exploitation. Much of this is now in the past, and governments are actively cultivating, through incentives and other means, the participation of the private sector in socio-economic development. Today, the importance of the sector is not in dispute. It generates two-thirds of Africa’s investment, three-quarters of its GDP, and creates the bulk of employment opportunities.

The goal of the Bank’s Private Sector Development Strategy, 2013-2017, is to create a competitive private sector across Africa. It will be key to sustainable growth, employment generation and poverty reduction, and hence to Africa’s economic transformation. The Bank has supported private sector operations from the end of the 1980s, but operations did not pick up significantly until the 2000s—rising tenfold from 2005 to about US$ 2 billion in 2013. A number of instruments and approaches have been devised at the Bank to expand the role of the private sector—including through public private partnerships.

Energy and the environmentThe Bank’s work in the energy sector dates back several decades and accounts for approximately 14% of the Bank’s cumulative commitments. The Bank has played a key role in providing regional member countries with energy, and also with the climate change knowledge, technical leadership and advice needed to adopt clean technologies. It has also been an advocate of policies and programs that take into account the power needs of Africa’s low-income economies. The Bank has also committed to ensure that environmental and social safeguards are mainstreamed into its projects.

Many African countries are today confronted by the uncertainties of climate change, be they long droughts or excessive flooding. The Bank has assisted regional member countries in the preparation of frameworks and strategies for climate-resilient and low-carbon development. For instance, it has assisted a number of countries to undertake climate-smart investments through partnerships with global and regional funding institutions. Its advocacy role has been important as is bound to increase in the next decade.

Knowledge is vitalThe Bank is aware that lending on its own is not enough, and that regional member countries also require analytical advice and capacity building. In the past few decades, the Bank has put considerable investment in its capacity to generate knowledge and to conduct policy dialogue. Today ‘knowledge’ underpins the Bank’s ability to respond to new challenges and provide intellectual leadership on African and global issues.

In recent years, the Bank has produced a several flagship publications, as well as economic and sector work, and a range of databases – many are the most important sources of sources of information on African development today. The Bank has also benefitted from collaboration with a number of African and international agencies.

The Bank’s own African Development Institute has been an important channel for capacity building, across a range of issues. It has helped enhance capacities in crucial analytical areas within the Bank and among its clients. The Institute also regularly invites persons of high standing to take part in its Eminent Speakers Program, which addresses economic and political challenges on the continent. One of the latest of these was Nobel Laureate Wole Soyinka.

2014: the Bank returns home When the Bank left Abidjan for Tunis in 2003, it was expected to be a brief stay. However, it was away for 11 years. By December 2013, an advance team had been sent to Abidjan to manage the return of the Bank. In August 2014 the President and Chair of the Board returned to Abidjan, marking the end of the Bank’s exile. The Ivorian Government had offered a 26-storey tower (the CCIA Building) in the centre of Abidjan to host the Bank, since repairs to its permanent headquarters were being completed. It is an imposing building across the street from the High Court of Côte d’Ivoire and Saint Paul’s Cathedral. The number of Bank staff had doubled during those eleven years: it now had over1900 staff, including 500 ‘in the field’.

By December 2014, about 1000 Bank employees had already taken up duty in Abidjan. A flag raising ceremony was held on 8 September 2014 to mark the Bank’s official return to headquarters. The event was attended by the Prime Minister of Côte d’Ivoire, Bank management and staff, and other prominent guests. The Agreement establishing the African Development Bank had come into effect on 10 September 1964, so the 2014 flag raising ceremony came just two days short of the official “50th Anniversary”. Later that day, the first meeting of the Board of Directors after the Bank’s return was held in the CCIA Building.


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African Development Bank 1964-2014 50 years at the service of AfricaGender


… making women a driving force for AfricaPromoting women’s role in society

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African Development Bank 1964-2014 50 years at the service of AfricaCross-border cooperation


… trading and speaking as oneIncreasing the movement of people and goods

From 2011 to 2012, the percentage of newly

approved projects that were rated as having

mainstreamed gender in a satisfactory manner

increased from 38% to 67%

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TUNISIARural water supply project

$133 m350,000 beneficiaries

RWANDASkills, employability andentrepreneurship program

$38 m5 m beneficiaries

MOROCCOIncreasing capacity on the Tanger-Marrakech railway line

$390 m10 m beneficiaries

GHANARural enterprise program


CHAD Institutional support forfragile states

$10 m6 Government ministries & agencies as beneficiaries (here: Health).

ANGOLA, MALAWI, MOZAMBIQUE, TANZANIA, ZAMBIATrans-boundary animal disease control project

$20 m12.7 m beneficiaries in 5 countries

BENINElectrification for 17 rural areas


KENYANairobi-Thika Highway

$186 m80,000 vehicles a day

SIERRA LEONERehabilitation of basic and non-formal education

$21 m98 primary schools renovated, 4000 teachers trained

UGANDARural income and employment enhancement project

$16 m1.4 m beneficiaries

“Now I just need to turn on the tap”.

“To be trained to bring life into the world. What a privilege!”.

“A healthy cow means a healthy profit. I make 70% more these days”.

“I passed my exams because I could revise by the light of a light bulb!”.

“The programguaranteed 75% of my loan. It was a real opportunity, as we had no other means”.

“The Thika road used to be something to avoid. Now everyone uses it”.

“More passengers, better connection, more trade, better links”.

“Just like the boys, now the girls go to school, and they toocan now help their families”.

“A 150% return on my investment has allowed me to send two of my grandchildren to one of Ghana’s best universities, but also to take on four full time staff”.

“Along with other farmers, we received training and financial support to set up our own savings and credit cooperative”.

African Development Bank 1964-2014 50 years at the service of AfricaFrom 4000 Bank projects in 50 years

… 10 recent examples

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2014: the Bank returns hometo Abidjan

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The Bank will continue to pursue the goals of its founders: economic growth and development are the surest guarantee of Africa’s freedom.

Lessons for the next 50 years

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Looking to the future

In early 2014, the African Union Summit held in Addis Ababa adopted “Agenda 2063” as the continental vision for Africa’s growth and development in the next 50 years. Devised by the African Union Commission, with support from the African Development Bank and the Economic Commission for Africa, its aspiration is “an integrated, prosperous and peaceful Africa, driven by its own citizens and representing a dynamic force in the global arena”.

Thus integration will continue to be the unalterable constant of Africa’s economic and political imagination in the next 50 years. The single African market must become a reality. Still, much more effort will be required to cement the new integration gains, including strengthening regional infrastructure, collaborating broadly on regional investment and industrial strategies, and opening up Africa’s skies to greater competition. The Bank’s role in Africa’s integration has received heightened impetus in recent decades through its support to regional projects, and participation in policy dialogue at the highest levels.

Africa is urbanizing at a very rapid pace and the bulk of the population will live in cities in a couple of decades. While enhancing the potential for the mobilization of its population for development, better provision of social services, and embarking on manufacturing, urbanization has its own unique challenges, especially the pressure it puts on utilities—from power to water and sanitation services. New ways of financing urban infrastructure will be required, possibly through the issue of municipal bonds. Here again the Bank has an important role to play both on the financing and policy sides.

Africa’s recent growth has shown that the continent has the potential to become a global growth pole in its own right, but that sustainability requires a good understanding of the challenges and how best to address them in a rapidly changing world economy. The private sector will be a key ally, and recent growth has been enabled largely by private sector investment, attracted by improving business climates in African countries. Partnerships between the public and the private sectors will become the preferred mode of financing of Africa’s development—public money on its own will not be enough.

It is well known that Africa is the world’s youngest continent and will continue to be so for many decades to come. How Africa harnesses its demographic dividend in the next decades will be a key factor. It will need to boost the quality of its youthful labour force through training and employment creation. This will determine whether the continent will be able to industrialize and emerge as a player in the global economy. Climate change will also be a key factor, with implications for how countries conduct their economic policies in the next several decades. Coordination regionally and globally will be of the essence but it will be important for Africa to strengthen its voice on these issues through broader collaboration within the continent itself. The Bank will be a key adviser on climate change related policies, and a financier of associated projects. It will need to develop in-house capacities to embark on these expanding tasks.

As the African Development Bank looks ahead, it can be satisfied in the knowledge that it has put itself at the service of Africa for the last 50 years, that it was able to weather the various economic and political storms of the last half-century, and that it has helped spur the continent’s economic development. The Bank has evolved as the needs of the continent have evolved, and yet throughout it has remained true to the goals of its founders. The goals will remain relevant for the next 50 years: economic growth and development are the surest guarantee of Africa’s freedom.

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What future for Africa’s young and growing population?

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The Bank is resolved to position itself, ‘at the centre of Africa’s transformation’.

Its prime objective during the next ten years is to make Africa’s growth

more inclusive and more sustainable.

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Going forward: Africa in the 21st Century

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From economic growth which is unevenly shared

… to true economic transformation where growth is strong, shared and sustainable

6 of the world’s 10 fastest growing

economies are in Africa

Challenges & opportunities

Ensuring true gender equality

African GDP has tripled in 10 years

African FDI has tripled in 10 years

… yet pockets of fragility and poverty

remain …

Managing and sharing natural

resources

Entering intoregional & global

value chains

Diversifying into industry & manufacturing

Reaping the full benefits of Africa’s ‘demographic dividend’

Strengthening governance

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african growthand development

50 years at the service

of Africa1964-2014

50 years at the service of Africa1964-2014

50 years at the service of Africa 1964-2014

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Transcript of 50 years at the service of Africa 1964-2014