President Macky Sall and African Development Bank Group Director Dr. Akinwumi Adesina call for substantial support for low-income African countries | African development bank

Senegalese President and Chairperson of the African Union, Macky Sall, has called on African Development Fund (ADF) development partners to allow the fund to tap into capital markets for more resources to meet the needs of critical development of member countries. The African Development Fund is the concessional lending arm of the African Development Bank Group that supports low-income countries on the continent

Sall said: “These are difficult times for governments. We need investment and development. Today, young people are raising their voices, demanding a job. They are impatient. Governments must listen and invest more to create jobs and make African economies more competitive. The African Development Fund needs significant funding and should be allowed to access capital markets.

The Senegalese leader was addressing representatives of regional and non-regional member countries of the fund and senior management of the African Development Bank Group, who paid him a courtesy visit to his office in Dakar. The President of the African Development Bank led the delegation.

Representatives of the African Development Fund were in Dakar for a two-day meeting to discuss the 16e replenishment.

Adesina thanked President Sall for his leadership of the African Union and for representing the continent at major international events to discuss Africa’s development.

The Head of the Bank Group spoke of the transformative impact of the African Development Fund, which is celebrating 50 years since its inception.

More ADF resources will help Africa deal with Covid, climate and conflict

Speaking earlier at the start of the third ADF-16 replenishment meeting, Adesina said a significant addition of resources would help the fund address multiple challenges, including the devastating effects of Covid-19, increased debt and economic vulnerability, growing disruption from climate change. , and the threat of a food crisis triggered by Russia’s war in Ukraine.

“Climate change is decimating ADF countries, even triggering strong migratory pressure towards Europe in dangerous waters,” said the head of the banking group. He pointed out that nine of the ten countries most vulnerable to climate change are in sub-Saharan Africa, and all of them are ADF countries.

Adesina projected that African Development Fund countries would need $500 billion to adapt to climate change by 2030. He said recent data showed Africa was only receiving 3% of climate finance world, adding that if this trend continues, the continent’s climate finance gap would reach $100 billion to $127 billion per year until 2030.

“The ADF will need many more resources, far beyond what donors can provide. We therefore need to ensure leverage to better resource the ADF,” Adesina said. He added that if allowed to go to capital markets, the fund could raise an additional $5.5 billion for each of its three-year replenishment cycles.

Adesina described the fund as a strong and unique institution offering good value for money.

“The African Development Fund has connected 15.5 million people to electricity; supported 74 million people through improved agriculture; transported 50 million people; built or rehabilitated 8,700 kilometers of roads; and provided 42 million people with improved water and sanitation facilities.

During the meeting with ADF delegates, President Sall reiterated the need for developed economies to reallocate part of their International Monetary Fund (IMF) Special Drawing Rights (SDRs) to Africa.

President Sall stressed that the African Development Bank, the prescribed incumbent, is best placed to deploy the SDRs on the continent by the end of this year.

Of the $650 billion announced by the IMF in 2021, African countries have only received a total of $33 billion.

The President of the African Development Bank pointed out that the bank can leverage SDRs three to four times to provide more support to African countries. “The bank’s AAA rating allows it to provide financing to African countries at much more attractive interest rates than they can obtain on their own through commercial financing,” he explains.

Senegalese Minister of Economy, Planning and Cooperation, Amadou Hott, underlined the key role of the African Development Fund in helping countries tackle vulnerability. “A strong mobilization of concessional and blended resources is more essential than ever to support our countries, support their recovery plans and meet all the challenges they face,” said Hott, who is also Governor of the African Development Bank for the Senegal.

Strengthen food security

The relevance of the African Development Fund is also reflected in the extreme agility of the African Development Bank Group to respond to the most serious crises, such as the launch of the 1.5 billion African Emergency Food Production Facility dollars. This facility helps avert an impending food crisis as a result of the war in Ukraine.

“Within 45 days of the facility’s launch, the African Development Bank’s Board of Directors last May approved $1.13 billion for operations in 24 countries,” Adesina explained. He added, “We expect to reach 35 countries by the end of this month, and many of them are African Development Fund countries. The facility aims to produce 38 million tons of food by facilitating access to fertilizers and climate-resistant seeds for 20 million African farmers.

In May 2021, the Center for Global Development ranked the African Development Fund second among 49 concessional finance institutions globally.

The replenishment discussions will conclude with a pledging event scheduled for November.

At the start of the third ADF-16 replenishment meeting, Adesina led delegates to observe a minute of silence in memory of Her Majesty Queen Elizabeth II.

Speech delivered by Dr. Akinwumi A. Adesina

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