African Development Fund (ADF): A Game Changer in Africa

Published on 9th July 2019

Fragility must not be seen as an end state.  Nations may go through fragility, but they can exit and become stable, dynamic, prosperous and resilient to debilitating shocks. That’s our goal for the African Development Fund (ADF)- a powerful instrument to help build resilience of low-income countries. For at the end of the day, for the African Continental Free Trade Area to work, we cannot integrate fragile states; we can only integrate resilient states. 

Not too long ago, Côte d’Ivoire went into political, social and economic turbulence. Its GDP dropped precipitously. The ADF came in handy, and decisively. Our policy and institutional support allowed the country to stabilize its macroeconomic indices. Support to disarm the combatants, reintegrate and create new employment opportunities for them helped towards much needed social and political stability. Today, Côte d’Ivoire has continued to achieve one of the highest growth rates in Africa and even in the world. 

We are proud of the role that ADF played in Madagascar. If there’s a nation that’s been through persistent fragility, it is Madagascar. Yet its people remain resilient. Troubled on every side, yes, but they are not distressed. Cast down many times but they are not vanquished. Through faith and unrelenting hope, the nation has continued to surmount the tempestuous winds of political cyclones that have from time to time hampered its growth and development. 

During the heat of political upheavals, while all other donors left the country, one remained. That institution is us- the African Development Bank Group. The ADF helped to bolster weak institutions, improve access to basic services like water and sanitation and build infrastructure. Since Madagascar joined the African Development Bank Group in 1977, the Bank has provided financing of $1.9 billion. Of this amount, ADF provided $1.17 billion.  Today current active portfolio is $366 million. 

Our projects in Madagascar are very impactful. Take the case of the Sahofika power project, which will help increase electricity generation by 192 MW, expandable to 300 MW. When completed, it will cut electricity tariff by 500%, from 25 US cents per KW/h to just 5 cents per KW/hr. Just imagine the hope that this will bring, a new zeal of life that’ll be sparked, and many jobs that’ll be created, as electricity access and affordability become possible for a nation with just 15% electrification rate.  It’s the kind of hope I witnessed when I visited three years ago one of the ADF financed projects, a rice irrigation project in Bas Mangoky in the north of the country.

On its impressive and carefully sculptured terraces on the undulating landscapes, farmers struggled to produce rice, without irrigation facilities, the right technologies and road infrastructure to connect them to markets. Madagascar imports up to 500,000 MT of rice, yet it has the potential to be a breadbasket for the Indian Ocean region. The ADF intervened and supported massive irrigation systems for 6,500 ha. Today, the yields have tripled from 2 tons per ha to 6 tons per ha. Farm incomes have risen by 141%. 

At the African Development Bank Group, we invest in Africa with our resources, but even more, with our hearts. We believe in Africa. The ADF is all about unleashing hope for the least developed countries. Unleashing opportunities. Unleashing prosperity in the midst of challenges. Unleashing pride and determination to succeed, against all odds. 

More still needs to be done. The journey is yet still long and tortuous. Supporting ADF countries is not a finished business; it is an ongoing business. An ongoing business to tackle poverty, inequality and fragility. An ongoing business to address climate change, gender biases, as well as tackle corruption, illicit capital flows, poor management of natural resources, building quality infrastructure and connecting nations. An ongoing business to entrench better economic and political governance. 

The milestones on the way are encouraging. ADF 14 cycle is well on track to achieving its targets. And with that, ADF would have committed $48 billion to low income countries since its inception in 1973. I am excited that with the ADF 14 cycle, an additional 7.1 million people will be connected to electrify, 5.8 million via the grid and 1.3 million through off grid systems. I am excited that over 42 million people will benefit from investments in agriculture, majority of whom will be women, just like in Bas Mangoky. I am excited that 7.5 million people will benefit from improve water and sanitation. All that’s going to happen in just one more year.

But the ADF impacts are much larger. Between 2011-2018, ADF replenishments have helped to connect close to 11 million people to better access to electricity.They have provided 90 million people with benefits from improved agricultural investments, 43 million of them being women. They have opened up access to improved transport for close to 67 million people. They have connected 714,000 small and micro enterprises to finance. They have provided close to 36 million people with access to better water and sanitation. They have provided access to education for 4.1 million people.

Just see the recently inaugurated impressive Senegambia Bridge, connecting Senegal and The Gambia, a dream since 1974, realized in January 2019 because of the ADF. Visualize the Addis-Ababa-Nairobi-Mombasa road corridor that’s helped to increase trade by 400% between the two countries. Spend a moment and take in the Kazungula Bridge that’ll connect Botswana and Zambia, Namibia and the Democratic Republic of Congo, and reduce waiting time from 14 days to just one hour!ADF is making a big difference in Africa! 

We’ve set high ambitions for ourselves. With the Affirmative Action for Women in Africa (AFAWA) we are now at the cusp of a financial engineering innovation for women that’ll transform the financing landscape for women in Africa, and could help leverage at least $3 billion for women. There’s momentum of support behind AFAWA. We’ve set our eyes on doubling the share of climate finance to $25 billion by 2025, half of which will be delivered during this ADF 15 cycle. We’ll make major progress on the Desert to Power which is targeted at turning the Sahel into a solar zone. We’ll scale up work on creating jobs for the youth to stem migration into Europe. We’ll help to address debt sustainability, through targeted policy and institutional support to improve debt transparency, accounting and debt vulnerability assessments, together with the World Bank and the IMF. We will ramp up support for private sector development and boost investments through business and investment regulatory reforms. 

We’ve significantly ramped up the Bank Group capacity to do more. Staff vacancy rates were halved from 24% in January 2018 to 12% by April 2019, just 2% to reaching the agreement for ADF 14, which we shall fully meet. The Bank Group has strengthened its regional presence and now has offices in 41 countries, including in 25 ADF countries and 16 transition states. 

I am delighted that we’ve recruited a dynamic Bank professional, Dr. Yero Baldeh, as Director of the Transition States Department. He made a transition from being a Country Manager in Ghana. The Bank will fully implement its One Bank model and all the recommendations of the independent evaluation of the Development and Business Delivery Model.

The stakes for Africa to meet the Sustainable Development Goals, which are just 11 years away, are very high. It’s time to significantly increase support for ADF countries. ADF countries cannot be left behind.

The ADF is unique. It is Africa-focused. It knows Africa. It is trusted by Africa. It delivers impressive results for Africa. 209 million African lives have been touched and transformed by the ADF in the last three ADF cycles between 2011-2018.

By Akinwumi A. Adesina

President,African Development Bank Group.

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