AfDB set to double lending
Outstanding African Development Bank loans and equity are set to double to $30.2 billion within five years, the institution’s president Donald Kaberuka said in Abidjan on Thursday
Outstanding AfDB loans and equity are set to double to $30.2 billion within five years, the institutions president Donald Kaberuka said in Abidjan on Thursday.
The pan-African development bank looks poised to acquire more muscle after the general capital increase, to around $100 billion, approved at its general meeting in the Ivorian capital yesterday.
The tripling of the banks capital the outcome of a year-long process to mobilize new resources will lead to an increase in private sector funding. There will be a focus on infrastructure, which already accounts for more than half of the banks portfolio.
Earlier, Thierry de Longuemar, AfDB vice president for finance, explained that the actual amount, and the effort that has been asked from the shareholders, was the most delicate point.
De Longuemar, who moved to the AfDB after a spell as treasurer of the Asian Development Bank, told Emerging Markets: The negotiation on the share of paid-in capital was a bit difficult. We expect it will reach 6% which is quite high, as it was 4% for the Asian Development Bank in May 2009.
The 39 poorest countries that have access to the African Development Fund will have 12 years to pay their contributions, while the others will have eight years to do so. The basic principle is that all shareholders can take part in this [capital increase] process, de Longuemar said.
Kaberuka, in an address to shareholders before being elected to a second term as president by the banks governors, also insisted on good governance values.
We are conscious of the facts that a growing portfolio requires even stronger risk management, he said.
The need to focus on infrastructure was also stressed by the Ivorian president Laurent Gbagbo just a couple of hours after a short power blackout in the packed auditorium in Abidjan. The lack of infrastructure is the main constraint that hampers the development of Africa, he said, without referring directly to the incident.
Foreign participants were taken aback by the blackout. It was a bit unfortunate, said an AfDB official, as it happened just when the president was arriving.
But local inhabitants just shrugged it off. We are used to it. This happens all the time, said Aime Chomou, head of protocol of one of the six traditional chiefs that attended the opening of the AfDBs meeting.
One foreign observer pointed out: This is felt as a sort of humiliation by the local population, as Ivory Coast was considered a regional economic powerhouse before the civil war at the beginning of the decade.