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FACTBOX-African Development Bank must be more ambitious-panel
22 Jan 2008 09:52:09 GMT
 Source: Reuters
Jan 22 (Reuters) - The African Development Bank (AfDB) should become Africa's top development institution to give Africa a bigger say in its economic future, according to a report by an independent expert panel.

Following are its main recommendations.

MAIN GOALS

The bank should focus on four challenges -- investing in infrastructure, building effective states, promoting the private sector and developing skills.

IMPROVED FINANCING CAPACITY

The report says that more than half the AfDB's risk bearing capacity is unused. To solve this mismatch in its financing ability, the bank should combine its two main lending arms to operate as one bank, enabling the bank to blend resources to meet client needs more effectively.

One arm is the ADF concessionary lending channel, which makes soft loans and grants to Africa's poorest countries and faces excess demand from African countries.

The other arm is the ADB channel, which provides loans at or near market rates to middle income African countries and the private sector and has excess capacity. Because of eligibility requirements only 15 of Africa's 53 countries are permitted to borrow from this facility.

The bank should take on more managed risk under the proposed new combined lending operation.

RESEARCH AND ADVOCACY

The bank's voice has in the past been muted and its agenda had "lacked focus", the report says, an apparent reference to a series of rows over financing and loan policy in the 1990s.

The AfDB should become the recognised authority on African development, the hub of a network for African policy and research, building understanding of what works and why.

The African Union is Africa's political voice. On development, the AfDB "can speak authoritatively for the continent".

AID PROLIFERATION

Some experts question the relevance of development banks, pointing to improved access to capital for many poor countries, the emergence of China as a major lender and the growing role of funds run by philanthropists such as Microsoft chairman Bill Gates.

The panel believes the multiplicity of donors makes it more important there be an African coordinating institution.

"Africans told us they want to reduce the burdens imposed by a large number of donors with separate systems and demands. They want predictable multi-year funding that respects national priorities," the report says. FOR REPORT ON PANEL'S RECOMMENDATIONS PLEASE DOUBLE CLICK ON [nL22308647] (Editing by David Stamp)


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Last updated:Tue Jan 22 09:52:17 2008