African Development Bank: Six decades of building capacity, unlocking infrastructure projects and securing relief

This September, the African Development Bank (AfDB) celebrates its 60th anniversary. While its impact may not always be immediately felt, here on the southern tip of the continent, recent decisions, such as the approval of an R18.5 billion loan for Transnet, signal the Bank's ongoing commitment to economic development across Africa. However, critics still refer to it as a “West African Club,” suggesting that its influence is unevenly distributed.

Admittedly, the Bank’s focus is incredibly broad and the issues it faces are myriad. But there’s no doubt that since its inception in 1964 with only 10 employees, the Bank has significantly expanded its reach and relevance across the continent.

Today, as Africa's leading development finance institution, the AfDB operates through three distinct entities: the African Development Bank (AfDB), the African Development Fund (ADF), and the Nigeria Trust Fund (NTF). It has a presence in 41 African countries, along with an external office in Japan, all dedicated to promoting sustainable economic development and reducing poverty in its 54 regional member states.

In pursuing this mammoth task (will we always have the poor among us?), the Bank has focused on projects spanning reliable electric power supply, securing clean and safe drinking water, eradicating malnutrition, and disease, promoting early-years education, improving transport, funding infrastructure projects, and promoting intra-African trade. During the latest reporting calculation, the Bank's authorised capital is subscribed to by 81 member countries (made up of 54 African countries and 27 non-African countries).

One of the critical decisions that the Bank made during its second decade was shareholders agreeing to invite non-African countries to join as members. By successfully adopting this strategy, the Bank was able to enhance its credit rating and profile globally. In 1983, 17 non-regional members participated in the Bank’s annual meetings and today that number has grown significantly.

The Bank ensures the continent’s voice is heard at global events and decision-making forums and assists in building capacity so that African countries can benchmark against developed nations. As a body, it plays a critical role in finding finance to fund projects, but also to ensure that the continent works collaboratively to prioritise high-impact interventions across the health, social protection, water and sanitation, and agriculture sectors, and to create a model for other regions to follow.

One of the Bank’s most impactful current initiatives has been seen through The Sustainable Energy Fund for Africa (SEFA), a Special Fund managed by the Bank that provides catalytic finance to unlock private sector investments in renewable energy and energy efficiency. Established in 2011 in partnership with the government of Denmark, SEFA has received contributions from the governments of America, UK, Italy, Norway, Spain, Sweden and Germany. Last year, SEFA committed $10 million for Africa’s first blended finance facility for to bring clean energy to Africa through solar mini-grids.

In my opinion, the AfDB is the closest institution we have that resembles the work of the European Union bodies that act on behalf of the interests of its member nations, and work to represent its interests on the global stage. But as the Bank has established itself and grown its capacity over numerous decades, the task at hand in the decades to come will be for it to double down on key focus areas while facing significant headwinds.

No Big Brother in the AfDB leadership

Interestingly, in the 60 years of the Bank’s existence it has never had a South African president. This is despite South Africa having the requisite skillset and global financing expertise to lead the charge with the continent’s most developed financial services markets.

Not that the current or former presidents lack the expertise to lead the Bank, I must say. The current President, Dr. Akinwumi Adesina, is a globally renowned development economist, World Food Prize Laureate, and former Nigerian Minister of Agriculture. He was unanimously re-elected for a second five-year term in September 2020, and has a year left at the helm. But perhaps South Africa has missed an opportunity to play a more strategic role in the establishment and growth of the AfDB.

So, where is the continent tracking against the UN SDGs?

The continent is facing a myriad of challenges, which are familiar to us: The devastating effects of war and growing threats of terrorism. Slow growth in two large economies (South Africa and Nigeria) has pulled down the performance of the continent, while climate change is doing damage and there is sticky inflation in a challenging global financial environment.

Despite this, Africa is on track as the world’s second fastest-growing region after Asia. According to the AfDB, 17 African countries are projected to grow by more than 5 percent this year and the number could rise to 24 next year. East Africa is leading the way, with an average growth rate that is projected to jump to 4.9 percent in 2024 and 5.7 percent in 2025.

However, these promising growth rates mask significant disparities between across the continent. According to the AfDB New Africa Sustainable Development Report, disparities in Africa’s Human Development Index are widening and while advanced economies rebounded from COVID-19, many countries on the continent are struggling with high debt, double-digit inflation, and limited access to crucial development and climate funding.

The report provides an in-depth review of African countries progress towards five sustainable development goals. The five SDGs under review are:

• Ending poverty (Goal 1)

• Eliminating hunger (Goal 2)
• Combating climate change (Goal 13)
•  Promoting peaceful societies (Goal 16)
• Strengthening global partnerships (Goal 17)

A call for a stronger future

While these findings may seem discouraging, the AfDB's work over the past six decades has undeniably contributed to building capacity, unlocking infrastructure development, saving lives, protecting livelihoods, and creating opportunities. Yet, significant challenges remain, emphasizing the need for scaled-up development financing and a stronger, more focused African Development Bank for the future.

As the AfDB marks this milestone, its next chapter will require bold strategies, greater regional cooperation, and innovative solutions to ensure that Africa not only meets but exceeds its development goals in the coming decades.