The African Development Fund (ADF) is expected to list on capital markets to raise more money for its 16th replenishment, The New Times has learnt.
African Development Fund is a concessional lending window of the African Development Bank Group (AfDB) for low-income countries and fragile states.
It comprises 32 contributing states and benefits 37 countries – including those experiencing higher growth rates, headed towards new emerging markets, and fragile states needing special support for basic service delivery.
The Fund’s resources are replenished every three year
“I have been pushing, with the support of the African Union, all our Heads of States, and now, our governors of the bank, ministers of finance and economy for Africa agree with me that the ADF should be allowed to go on capital markets to raise more money,” said Akinwumi Adesina, President of the AfDB, in an exclusive interview with Doing Business For various reasons including the challenges in Ukraine that have affected donor countries, Adesina said he doesn’t expect that suddenly they are going to have a tremendous amount of growth in concessional financing.
We have to find new ways of meeting the needs of African countries, he said.
“ADF has accumulated equity of $25billion, it can easily use that amount to go on capital markets and raise at least $33billion which will increase the quantum of resources available to countries that borrow from the African Development Fund,” he disclosed.
“I was very delighted that the governors of the bank gave us an okay to go in this direction and develop plans accordingly, so, we are working on that.”
That will have several advantages, according to him; it will increase the required amount of resources available, fund sustainability, and leverage donor money, “in such a way if you put a dollar there, you get four times of it.”
With no specific time of the listing, Adesina explained that they have to first change an article of the Fund to allow proceedings.
“We have to change the article of the fund that was put in place in 1972 which has prevented it from going to capital markets. The call to do so was given by African Heads of States at African Union Summit in March.”
Now with support from the bank’s governors, we have established an internal system that is going to take care of that, he noted.
Adesina said that the bank will be working on that this whole year and by next year, changes will begin with the approval of boards of governors to make sure the fund gets to the capital markets.
In the last 50 years since its establishment in 1972, the fund has provided $45Bn financing to countries.
The ADF ranks second among all the 49 bilateral and multilateral institutions surveyed by the Center for Global Development (CGD) in its Quality of ODA index (QuODA).
Source: The New Times
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