AfDB proves its resilience with strong record of activity in 2022

African Development Bank (AfDB) Group has so far invested over US$8 billion to support Africa’s recovery

The African Development Bank (AfDB) Group remained resilient in the face of the unprecedented global economic challenges in 2022, investing over US$8 billion that year to support recovery across its 54 regional member countries, it announced during its annual meetings.

At a Financial Presentation and Development Impact luncheon held on Thursday 25 May, the Group’s senior vice-president Swazi Tshabalala said that three years after the onset of the COVID-19 pandemic, the development landscape “remains challenging and uncertain.”

The Financial Presentation and Development Impact session is a signature event of the Annual Meetings at which the achievements of the Bank Group over the preceding fiscal year are highlighted.

The confluence of multiple challenges, including the pandemic, inflationary pressures, rising public debt levels, conflict and insecurity and the impacts of climate change, slowed the continent’s recovery, with Africa’s economic growth dropping by 1% from last year, Tshabalala said. Even more concerning: an additional 15 million people were pushed into extreme poverty.

“Despite this challenging environment, the Bank has remained agile and responsive to the changing needs of African countries. Through transformative projects across the Bank’s operational priorities, in 2022 we invested over $8 billion dollars to support the continent’s recovery,” Tshabalala said.

These investments include a US$1.5 African Emergency Food Production Facility set up in response to the prospect of a major food crisis in Africa due to Russia’s invasion of Ukraine. Overall, the bank’s support to the agriculture sector benefited 2.9 million people in 2022, Tshabalala said.

Another achievement came as the Bank made “its largest investment in a single year on regional integration initiatives, for an amount of US$1.5 billion,” the bank senior vice-president added.

The 2023 Annual Meetings took place under the theme “Mobilising Private Sector Financing for Climate and Green Growth in Africa, underscoring the Bank’s focus on supporting African countries to meet their climate action goals and to advance mitigation and adaptation efforts.

Following Tshabalala’s presentation, Dr Victor Oladokun, Senior Advisor to the President of the African Development Bank Group, and the event’s moderator, invited the Bank Group’s operational vice presidents and senior management to take part in a panel discussion to expand on how their complexes had responded to the challenges over the past year.

The vice presidents – Jacques Djofack, Director of the Financial Management Complex representing Hassatou N’Sele, vice-president for Finance and Chief Financial Officer; Dr Kevin Kariuki, vice-president for Power, Energy, Climate and Green Growth; Solomon Quaynor, vice-president for Private Sector, Infrastructure and Industrialization; Dr. Beth Dunford, vice-president for Agriculture, Human and Social Development; and Marie-Laure Akin-Olugbade, vice-president for Regional Development, Integration and Business Delivery – addressed each of the Bank’s High 5 priority areas.

Akin-Olugbade said scaled-up approvals in 2022 had enabled headroom for financing investment projects, the food crisis, as well as across the Bank’s High 5’s. “More than 30% of approvals were in cross-border projects,” she said.

Djofack noted that despite the volatility of the capital markets, the Bank maintained its triple AAA rating from leading rating agencies – Moody’s, Fitch, and Standard & Poors. The Bank’s shareholders accelerated their contributions to the last capital increase, enabling the Bank to provide countercyclical assistance to its regional member countries, he said.

In 2022, levels of activity within the Private Sector, Infrastructure and Industrialization Complex showed recovery to pre-COVID-19 levels, Quaynor said. Kariuki, of the Power, Energy, Climate and Green Growth Complex, said the bank exceeded its target of 40% climate investments, hitting 45% in 2022.

The Board’s approval of US$1.5 billion for The African Emergency Food Production Facility enabled 35 countries to get climate adapted seeds and fertilizer to help their populations weather shocks, Dunford said. “By the end of last year, the Bank Board had – in record time – approved loans and grants of US$1.56 billion under the Facility,” she said.

In another instance of climate-related support, Malawi received a payout of US$14.2 million after a severe drought under the Bank’s Africa Disaster Risk Financing Program (ADRiFi), which mitigates the financial impact of natural disasters and climate-related events by insuring countries against these shocks. This helped protect agricultural livelihoods that drive more than 60% of Malawi’s workforce.

Leave no one behind

Commenting on the insecurity and fragility that remain key challenges in Africa, Akin-Olugbade stressed that the Bank’s engagements should leave no one behind. She underscored the need for continued engagement with fragile countries, however problematic the context. “Insecurity and fragility have no borders,” she observed.

Despite the continuing headwinds, the senior vice-president expressed optimism for the institution in her closing words. In December 2022 the African Development Fund, the Bank Group’s concessional lending window, saw its 16th replenishment – the largest to date in the Fund’s history.

Tshabalala said the African Development Bank Group had earned the trust of its shareholders and will continue to play a strong leadership role in responding to the continent’s challenges and evolving needs. The African Development Fund is the Bank Group’s concessional lending window.

“We are committed to being worthy of this trust. Our actions, as Africa’s premier development institution, are consequential and more urgent than ever. We understand that alone, our mandate is unachievable… but together, there is nothing that we cannot achieve,” Tshabalala said.

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