President of the African Development Bank (AfDB), Akinwumi Adesina, on Wednesday, said that in the past nine years, the bank had spent $50 billion to boost infrastructure on the African continent.
The Nigerian-born chief executive of the bank also stated that Africa’s economic growth is set to accelerate to 3.7 per cent this year and 4.3 per cent next from 3.1 percent.
“African economies are experiencing great resilience despite the challenges posed by climate change, geopolitical tensions, global inflation, rising debt, among others,” Adesina told the annual meeting of the bank in Kenya.
Adesina said that two weeks ago the International Monetary Fund (IMF) had approved multilateral banks such as the AfDB lending against the Fund’s Special Drawing Rights (SDRs) monetary reserves.
SDRs are interest-bearing international reserve assets granted to IMF member countries in proportion to their shareholding.
“If the approved limit of $20 billion of the SDRs is channelled to multilateral development banks like us, we can leverage this to deliver at least $80 billion of new financial support,” Adesina said.
Despite headwinds, he said that more than half of African countries, 31 in all achieved higher real Gross Domestic Product (GDP) growth rates in 2023 than in 2022, while 10 African countries are among the 20 fastest growing economies in the world.
In 2023, Adesina said AfDB’s financing totalled over $10 billion, across all its high five priorities to: Light up and Power Africa; Feed Africa; Industrialise Africa; Integrate Africa; and improve the quality of life of the people of Africa.
According to him, since the launching of the High 5s in 2016, AfDB’s financing has impacted the lives of over 400 million people.
Last year, Adesina said, the work of the bank had significant impacts across the continent with 11 million farmers provided with access to improved agricultural technologies.
Also, he said that 8 million people were provided with access to new sanitation facilities; 3.5 million people provided access to improved transport; 2.8 million people provided with better health services; 1 million people provided with access to clean water; and over 443,000 enterprises provided with access to finance.
“When the Russian war in Ukraine erupted, it posed tremendous food security risks to Africa. To forestall a crisis, the Bank launched a $1.5 billion emergency food production facility, to support Africa’s ambitions to reduce its food dependency over a two-year period.
“As of April 2024, we have approved loans and grants of $1.496 billion for emergency food production in 35 countries. With $323 million of additional support from Japan, the US, Norway, Germany and the Netherlands, we have fully committed over $1.8 billion to 35 countries.
“I am pleased to report that we have reached 10.5 million farmers and supported the production of 26 million tons of food, valued at $10.79 billion or 90 per cent of our target market value.
“The African Development Bank has consistently invested heavily in infrastructure.
In the past nine years, we have invested well over $50 billion in infrastructure projects on the continent, by far the largest investment of any multilateral Development Bank or institution. And the impacts are visible,” he stated.
He stated that the bank was mobilising $375 million for financing the railway linking Nigeria to Niger republic as well as $3.5 billion to $5 billion towards the development of the Liberty corridor to link Liberia and Guinea. “We have worked with partners of the Africa Investment Forum to mobilise $15.6 billion of investment commitment towards the development of the Lagos-Abidjan corridor,” he stated.
The AfDB, he said, is in very strong financial shape and has maintained its AAA rating—the only AAA-rated financial institution in Africa—by all the global credit rating agencies,” he stated. The bank, he said, posted very strong financial records for 2023.
“ First, income from loans and treasury investments increased from $775 million in 2022 to $1.73 billion in 2023—an increase of 123 per cent. Second, net income before distributions, at $545 million, is the largest ever in the history of the Bank. Third, the amount allocated to reserves ($335 million), is the highest ever in the history of the Bank,” he said.
Last month, Adesina said the AfDB issued a hybrid capital on the global capital market, the first ever by a multilateral development bank, creating a new global asset class for investors.
The $750 million hybrid capital, he said will be leveraged three–four times to expand the Bank’s lending capacity.
To tackle climate change, he said the bank was well on its way to reaching its goal of mobilising $25 billion in climate finance, stressing that last year it devoted 45 per cent of its total lending to climate finance.
“Together with the Islamic Development Bank, International Fund for Agricultural Development, the OPEC Fund, the Arab Bank for Economic Development in Africa, the Africa-Import and Export bank, and the West Africa Development Bank, we are establishing Special Agro-Industrial Processing Zones in 11 African countries, including a $3 billion facility by the African Development Bank (Afreximbank) and the ARISE platform,” he added. (ARISE NEWS)