Republic of Ireland becomes African Development Bank Group 81st shareholder

AfDB NEWS & EVENTS

05-May-2020

The Republic of Ireland has become the African Development Bank Group’s 81st shareholder, following a declaration issued by the institution’s President, Akinwumi Adesina, on 24 April 2020. 

Ireland’s application to join the African Development Bank Group was approved during the Annual meetings of the Board of Governors of the Bank Group held in Malabo, Equatorial Guinea, in June 2019.

In February 2020, the nation deposited the Instrument of Ratification of the Agreement Establishing the African Development Fund with the Secretary-General of the Bank Group during a delegation visit to the Bank’s headquarters, moving one step closer to concluding the membership process. 

“Ireland’s joining the African Development Bank is a mark of great confidence in the Bank. I am delighted to welcome Ireland as the 81st member of the African Development Bank. Ireland’s membership and shareholder support will further boost the African Development Bank’s mission to accelerate Africa’s economic development,” African Development Bank’s President Akinwumi Adesina declared.

Commenting on the membership, Irish Minister for Finance and the Minister for Public Expenditure and Reform Paschal Donohoe stated: “The African Development Bank and its sister the African Development Fund play an important role in fostering sustainable and inclusive social and economic growth and prosperity, helping the African continent to realize its potential to be the continent of promise and opportunity. I see our membership of the Bank and Fund as an investment in this potential. Ireland’s partnership with these important regional multilateral institutions will both advance our shared development priorities and will open future opportunities for Irish businesses in the region.”

Ireland’s Strategy for Africa 2025 includes a commitment to collaborate with the critical financial institution on the continent, as well as to explore new partnerships to support policy development and program implementation; and deepen engagement in blended finance mechanisms for job creation.

Simon Coveney, Minister for Foreign Affairs and Trade, said there was strong alignment between the priorities of Ireland’s international development policy, A Better World, and the African Development Bank’s overarching High 5s strategy. “This marks an important deepening of Ireland’s long standing partnership with Africa. I know that membership of the Bank will further strengthen the role Ireland plays in sustainable and inclusive development on the continent. Ireland’s membership also comes as the African Development Bank provides crucial support to countries’ COVID-19 response,” he said.

“Ireland’s African Development Bank membership is also an important expression of our commitment to, and investment in, the multilateral system and of our contribution to peace, security and sustainable development in Africa.  This partnership will help us reach the furthest behind first,” Coveney added.

Membership of the Bank Group is subject to the signing of the Agreements establishing the Fund and Bank, deposit of the instruments of acceptance/approval of the Fund and the Bank Agreements, and the payment of the initial subscriptions to the Fund and capital stock of the Bank.

Ireland fulfilled those requirements, having made payments for its initial subscriptions and also depositing its instrument of ratification of the Bank Agreement with the United Nations, the statutorily appointed depositary and its initial deposit of the instrument of acceptance of the Fund Agreement with the Secretary-General of the Bank Group.   

Established in 1964, the African Development Bank Group authorized capital is subscribed by 81 member countries, made up of 54 African countries (regional members) and 27 non-African countries (non-regional members). 

COVID-19 crisis provides impetus to accelerate African regional integration – panellists, ADI webinar

AfDB NEWS & EVENTS

30-Apr-2020

The global response to the COVID-19 pandemic must be coordinated and targeted at livelihoods to prevent an upsurge in inequality, delegates at an African Development Institute (ADI) webinar urged on Wednesday.

“This is an opportunity to re-think macro-economic policy in Africa. We should not go back to our old ways. The sense of urgency that is coming from the crisis must translate into accelerated action on things that will make our continent less dependent on others in times like this. We should aim not only to build back the economy, but to build back better,” the speakers recommended.

The delegates called on African leaders to use the urgency created by the pandemic to accelerate investments in implementing the African Development Bank Group’s Hi 5s, accelerate regional integration and deepen local financial markets to withstand future shocks as envisaged under the African Continental Free Trade Area agreement.

COVID-19 is spreading quickly in Africa and is already straining the continent’s fragile health systems, economies, trade, cultures, societies and livelihoods. Africa’s public and private sectors, individuals and communities are struggling to respond to the pandemic amid commercial lockdowns and disruption of income sources.

It is estimated that Africa will require stimulus worth $110-$150 billion to provide social and economic relief to its economies in the wake of the pandemic.

The webinar, titled Enhancing Resilience in African Economies: Macro-Economic Policy Responses to COVID-19 Pandemic in Africa, sought to address the implications for African economies as many nations scrambled together fiscal stimulus packages to avoid total economic collapse.

The panellists, comprising global leaders, researchers, academics, former finance ministers and central bank governors, explored potential fiscal, monetary and governance reforms that would bolster resilience of African economies.

Key recommendations that emerged include the need for innovative fiscal, monetary and exchange rate policies that focus on  saving the livelihoods of citizens, rescuing thriving private investments, including small businesses, to protect jobs, and strengthening regional and national institutions to make them more independent, resilient and effective.

Another key recommendation is the need to strengthen health infrastructure across African countries, invest in STEM to equip countries for the digital economy and to build capacity of member countries to implement existing policies and continental declarations already acceded to by them.

The seminar highlighted the fact that Africa’s youthful population is a big plus for Africa’s ability to withstand the COVID-19 pandemic. The virus is known to have more effects on the aged (over 60 years) and people with underlying health conditions. The delegates called on leaders to consider lock-down policies based on science and evidence relevant to the realities of each country. There is no magic bullet that fits every country’s conditions. 

Noting that COVID-19 is a pandemic within many other endemic diseases and external shocks such as malaria, tuberculosis and climate change, the experts recommended the creation of an Africa Group of 30, comprised of finance ministers and Central Bank governors to champion best-case macro-economic policy responses to these persistent problems.

Government and business leaders must improve transparency and accountability to attract more investment inflows and donor assistance for inclusive development, the panellists agreed.

More than 350 participants tuned into the seminar, the first in a series held by the ADI as part of its Global Community of Practice (G-CoP) to facilitate knowledge and policy dialogue to help African countries respond better to the pandemic.  

In closing, ADI announced that it is already developing a Public Service Delivery Index (PSDI) to help improve transparency and accountability in public service delivery in Africa, and will soon launch an African Public Finance Management Academy (PFMA) to help countries with prudential public finance management.

The ADI and the lead experts in the African Development Bank Group and globally, will synthesize the recommendations emerging from the seminar in a policy brief to help African countries and other stakeholders respond effectively to COVID-19 going forward, as well as to future crises.

The African Development Institute (ADI) is the African Development Bank’s focal point for Capacity Development. Its goal is to lead efforts at building sustainable capacity for development effectiveness in the Bank’s regional member countries.

2020 Annual Meetings of the African Development Bank Postponed

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29-Apr-2020

In the wake of the outbreak of COVID-19 and the resulting global disruption, the 2020 Annual Meetings of the African Development Bank and the African Development Fund will now hold from 25-27 August 2020 in Abidjan, Cote d’Ivoire.

The meetings were originally scheduled for May 25-29.

Please visit www.afdb.org for updates on the 2020 Annual Meetings.

African Development Institute to rally African policy planning for macroeconomic resilience against COVID-19 pandemic

AfDB NEWS & EVENTS

28-Apr-2020

The African Development Institute of the African Development Bank will host a virtual seminar on Wednesday, 29 April 2020 to develop responses to macroeconomic policy challenges facing Africa nations in the wake of the COVID-19 pandemic.

Like elsewhere, African countries are not spared the devastating impacts of the COVID-19 pandemic on their national health systems, economies, trade, cultures, societies and livelihoods. The public and private sectors, individuals and communities are struggling to respond to the pandemic amid commercial lockdowns and disruption of income sources.

The seminar, titled “Enhancing Resilience in African Economies: Macro-Economic Policy Responses to COVID-19 Pandemic in Africa,” seeks to address the macroeconomic implications for African economies as many nations struggle to roll out fiscal stimulus packages to avoid a total collapse and save livelihoods.

Among the participants, are development partners, including colleagues from the World Bank, International Monetary Fund, the African Union Commission; United Nations Economic Commission for Africa, the United Nations Development Program and representatives of academic institutions. Key speakers include former finance ministers, central bank governors, global experts and Bank Group executives.

The seminar will also address the ways in which COVID-19 has highlighted inequality in the global economy and the vast disparities in the responses by industrialized countries as against those of African countries, which have had to rely on development institutions to implement contingencies.

The African Development Bank has played a lead role in responding to the crisis by rolling out a series of financial and technical measures to cushion African economies and livelihoods. Its primary channel for the interventions is a Response Facility announced 7 April that provides up to $10 billion to governments and the private sector.

The facility comprises $5.5 billion for sovereign operations in African Development Bank countries, $3.1 billion for sovereign and regional operations for countries under the African Development Fund, the Bank Group's concessional arm that caters to fragile countries and $1.35 billion for private sector operations.     

The Bank also raised $3 billion from a three-year Fight COVID-19 bond in late March, and extended $2 million in grants to the World Health Organization to bolster the capacity of 41 African countries on infection prevention, testing and case management. 

The IMF and the World Bank have also announced COVID-19 response packages that target African economies and health systems.

The Seminar is the first of a series being organized under the auspices of the Global Community of Practice (G-CoP) on COVID-19 Response Strategies, established by ADI to stimulate policy dialogue that will inform Regional Member Countries’ short, medium and long-term policy responses to the COVID-19 pandemic.  

ADI, a department of the Bank, is the focal point for the institution’s Capacity Development initiatives. In that role, ADI contributes to efforts at building sustainable capacity for development effectiveness in the institution’s regional member countries.

IDEV 2019 Annual Report: From experience to knowledge and learning

AfDB NEWS & EVENTS

IDEV publishes its 2019 Annual Report

28-Apr-2020

For Independent Development Evaluation (IDEV), 2019 was a year of helping the African Development Bank Group and its Regional Member Countries (RMCs) to transform experience into knowledge and learning through independent evaluations. 

IDEV has supported both the Bank and its RMCs to achieve their development goals through the lens of the Bank’s High 5 priorities, the 2030 Agenda for Sustainable Development, and the African Union Agenda 2063. IDEV delivered 13 evaluation products, conducting and facilitating evaluations, knowledge sharing events, and capacity development activities in more than 26 countries in Africa.

IDEV’s evaluations informed high-level discussions and decisions, such as those on the Bank’s 7th General Capital Increase and the 15th replenishment of the African Development Fund. It also introduced new evaluation products in response to expressed knowledge needs of the Board of Directors and Bank Management. Independent evaluations this year contributed to the continuous improvement of the Bank’s systems, processes and mechanisms for delivering on its mandate.

IDEV’s work also contributed to the entire evaluation community by providing an opportunity to learn from experience and to plan and deliver development results to the highest possible standards. Promoting a culture of knowledge sharing and learning, strengthening the evaluation capacity of stakeholders, and developing strategic partnerships on the continent and beyond, continued to be priorities in 2019.

“Going forward, I believe it is essential to work with the Board and Bank Management to create a culture of results measurement that feeds back into decision-making and helps drive the Bank and the continent’s transformation. Helping the institution to learn from experience is the first step. In 2020, we look forward to helping it turn that knowledge into action,” Roland Michelitsch, the new Evaluator-General, said.

African Development Bank Chief Financial Economist Edson Mpyisi discusses the locust crisis in the East and Horn of Africa regions and the Bank’s work to help affected African nations

AfDB NEWS & EVENTS

28-Apr-2020

A new wave of billions of locusts is set to devour crops across the East and Horn of Africa region, setting off concerns about regional food security and livelihoods of millions of farmers. We asked African Development Bank Chief Financial Economist Edson Mpyisi about the locust crisis and the Bank’s work to help affected African nations to cope.

Question: Locust swarms come around every 10 to 15 years, they're nothing new. What makes this season's swarms in East Africa and the Horn different?

Locusts come around every few years in different parts of the world. However, Kenya hasn’t experienced a locust swarm invasion of this magnitude in 70 years, Ethiopia in the past 25 years. This is a locust crisis that has affected roughly 10 countries in the East and Horn of Africa. The swarms started in the Arabian Peninsula, moved into Somalia and then Ethiopia and Kenya – those three countries are the epicenter. Sudan, South Sudan, Eritrea, Djibouti, Uganda and Tanzania have also been impacted.

Locusts move fast, they take flight and the wind can carry them up to 150 kilometers per day - and the winds keep on shifting. One country might be affected by locusts today and a neighboring country might not have any, but after three or four days, the locusts could be brought over by the winds. That is why a regional response is needed.

We are very concerned that the new swarms – “the second wave” – will cause considerably more damage that the swarms seen last November and December in Africa, which arrived after most crops had matured or been harvested. A new generation of locusts born from the eggs of the last swarms will mature and start feeding on vegetation and crops in May and June, which is the main growing season in the region. That’s when maize, beans, sorghum and other crops will sprout succulent, green and leafy plant material – ideal feeding for locusts. If locust swarms aren’t controlled by that time, up to 100% of the farmers’ crops could be consumed, leaving some communities with nothing to harvest.

Question: How much damage can one locust do, and what can be done to stop them?

One locust can consume its own weight in one day, which to put it in perspective  is equivalent to an average person consuming 70kg of food in one day!  It has been estimated that 100 to 150 million locusts can settle on one square kilometer of land – and in one day,  consume the same amount of food as 35,000 people. They are highly efficient eating machines! When they settle in an area and leave after a few days, they’ve eaten everything green and the place is just bare.

The Bank has responded to a regional appeal, mostly through the United Nations system, to mitigate the locust invasion. We have contributed $1.5 million in grants to that regional appeal, in response to a request from the Intergovernmental Authority on Development [IGAD], mostly for locust surveillance and control. IGAD covers most of the countries that have been affected. At the national level, some affected countries are considering re-allocating resources from other ongoing African Development Bank projects toward locust response. For example, Kenya has requested to re-allocate about $5 million in resources committed to other Bank-funded projects to address the locust emergency.

In the longer term, we are developing regional projects under climate smart agriculture that would include surveillance and monitoring of locusts, as well as strengthening preparedness for future swarms.

Question: Some are calling this locust invasion "Locust-19" - in reference to COVID-19. In what ways are the coronavirus pandemic and locust swarms not only connected, but also a double threat to African economies and food security?

The locust invasions come at a very unfortunate time. Compared to other parts of the world, the locust invasion and COVID-19 crisis are a double disaster for the entire East and Horn of Africa. To control the locusts, you have to go out and conduct surveillance to find out where they are, how many there are, where they may move to next. You also need to be able to spray pesticides either from the ground or aerially. Under COVID-19 lockdown, this is difficult because people can’t move as much as before. When we talk about aerial spraying, you need aircraft – helicopters for surveillance and planes for spraying. Restrictions on shipments and logistics worldwide also affect aircraft. For example, Somalia was supposed to receive surveillance helicopters from South Africa, which need to stop and refuel in different countries on the way. They can’t do that due to COVID-19 travel restrictions. This causes backlogs in getting the helicopters to come and do the work.

Pesticides are also usually sourced from different parts of the world including China, Europe, and South America. COVID-19 lockdowns are causing disruptions in the supply chains and logistics for chemicals and that is also slowing interventions.

All these factors converge to make COVID-19 and locusts a double disaster in the East and Horn of Africa.

Question: Is spraying insecticides enough to stop the locusts?

Spraying is one of the most effective ways of controlling locusts but it entails much more than simply spraying. One needs to conduct surveillance ahead of time to know the locations, numbers, terrain, livelihoods systems, and methodologies for data collection. You also have to use the right pesticides and bio-pesticides and you have to know how to use them. When we work with the Food and Agricultural Organization, there are standard operating procedures. If you don’t use the pesticides correctly, you could affect other ecosystems – including fish, birds, and water. We have to protect not only the environment, but also the people doing the spraying and those in the affected communities. The people who are using these chemicals need to undergo training on how to use them safely.

In addition to controlling the locusts, it is very important that we also consider what happens after the locusts are eradicated. Most of the affected communities won’t have any seeds and inputs for planting, as the locusts will have destroyed their means to farm. We have to find ways to safeguard livelihoods and also provide inputs and tools for early recovery of those communities. Aside from locust-control measures, we have programs to provide seed, fertilizers and other packages to crop and livestock farmers.

South Africa: African Development Bank, SA Taxi sign $100 million loan agreement to boost industrialization, enhance transport sector

AfDB NEWS & EVENTS

22-Apr-2020

The African Development Bank and SA Taxi Development Finance Proprietary Limited, a wholly owned subsidiary of SA Taxi Holdings Proprietary Limited (“SA Taxi”), have signed a $100 million loan agreement to support the firm’s growing strategy to empower taxi operators with limited access to finance from traditional financiers.

The loan agreement, which carries an eight-year tenor and includes a six-month grace period,  

was signed on Monday, 16 March between the Bank’s Director of Infrastructure & Urban Development Amadou Oumarou, and Lorenzo Cardoso, Chief Financial Officer and Director of SA Taxi.

“The funding transaction entered into with the African Development Bank is instrumental to SA Taxi’s medium and long term strategy. The tenor and size of the transaction will contribute towards the continued success of SA Taxi to empower SMEs and create opportunities that ensure the sustainability of the minibus taxi industry,” Cardoso said. “We are proud to be an internationally recognised African business.”

The financial package, comprising a senior loan of $10 million and an associated facility of ZAR 1.4 billion (about $97 million), will provide a powerful boost to industrialization through improved urban mobility for working class South Africans.

SA Taxi is a vertically integrated minibus taxi platform utilizing specialist capabilities, enriched proprietary data and technology, to provide developmental finance, insurance and other services to empower Small and Medium Enterprises (SMEs), thus enabling the sustainability of the minibus taxi industry.

In addition to minibus vehicle retail and financing services, SA Taxi also provides specialized minibus taxi insurance, vehicle tracking, maintenance, and refurbishment services to taxi operators through SA Taxi Auto Repairs and SA Taxi Protect, its wholly-owned subsidiaries.

While approximately 80% of SA Taxi clients are unbanked and may not ordinarily qualify for the formal banking sector, under the Bank’s financing arrangement, approximately 25% of direct beneficiaries will continue to be women and approximately 22 % will be youth under 35 years old. The Bank’s facility is expected to contribute a significant component of SA Taxi’s funding requirement over the next three years.

Oumarou described the signing as an exciting new chapter in the Bank’s partnership with SA Taxi that would bring real and tangible benefits to the people of South Africa with the prospect of scaling up this model to other African countries that are facing significant urban public transportation challenges. 

“The evolving public transportation systems with para-transit minibuses filling the market segment between private taxis and municipal bus transit, is key to achieving South Africa’s economic success and social progress,” Oumarou, said. “Therefore, the Bank is proud to be supporting the SA Taxi Group in its pioneering efforts to positively shape the ecosystem of public transportation services in South Africa.”

Up to 90 % of vehicles financed by SA Taxi are manufactured in South Africa, a powerful boost to industrialization. This makes the loan facility consistent with the Bank’s Ten-Year Strategy (2013 – 2022) and Country Strategy Paper for South Africa 2018-2022, as well as two of its High 5 priorities: Industrialize Africa and Improve the Quality of Life for the People of Africa.

The Bank’s funding will ultimately support SA Taxi’s continued investment in the taxi industry and its strategy of enabling taxi operators to replace old vehicles with newer, safer and lower emission minibus taxis.