The African Development Bank’s (AfDB) shareholders have endorsed the request to tripling its (Bank’s) capital resources to nearly US$100 billion to allow the bank to sustain a higher level of lending in response to overwhelming demand in all countries.
The decision was made in Washington last week during the meeting by the Committee of Governors that represents the Bank’s shareholders.
According to a press release from AfDB, in response to the financial crisis, the Bank front loaded its commitments, put in place new instruments to facilitate trade, and restructured its portfolio.
“As a result the Bank had used its available resources more quickly than previously expected,” a press release reads in part.
Governors said that the conclusions represented a vote of confidence in the Bank and recognition of the exceptional efforts undertaken in response to the financial and economic crisis, the release added.
Donald Kaberuka, president of the AfDB noted that the decision signaled shareholders’ strong confidence in the Bank.
“Our response significantly helped Africa weather the storm of the crisis. But the massive increase in demand for financing has brought us close to our lending limits,” Kaberuka said in the release.
With the capital increase, Kaberuka observed that the bank will be better able to meet the needs of African countries, including low-income countries, and help them return to the previous high rates of growth.
According to the International Monetary Fund (IMF) forecasts, output in sub- Saharan Africa in 2010 will expand by 4 percent in 2010 compared to 2 percent in 2009.
In an email interview with the Resident Representative of AfDB, Diko Mukete, said that the capital increase would put the Bank in a position to meet the continent’s growing infrastructure demands such as roads, water and sanitation, energy, and increasingly important ICT infrastructures in partnership with other development partners.
“It showcases the marked progress made by the Bank and the increased relevance of its activities across the spectrum of its regional member countries, which include middle income, low income and fragile states,” Mukete said.
Currently in Rwanda AFDB has a portfolio of 19 projects which amounts to over US$500million.
Key sectors of intervention are mainly in infrastructure development, agriculture, and higher education, science and technology.