What Is the African Development Bank?
The African Development Bank (ADB) is a financial institution that funds projects that promote economic and social progress throughout the continent. The bank is also known as Banque Africaine de Développement.
The bank has 54 member states among the African nations and 26 non-African member states.
- The African Development Bank finances private and public projects that promote economic and social progress.
- Core infrastructure such as highways and water systems are a priority.
- Its current major projects include the construction of a 745-mile from Lagos, Nigeria, to Abidjan, Ivory Coast.
- Technical and vocation education for young Africans is another priority.
- Public and private projects are eligible for financing through the Bank.
- The African Development Fund and the Nigeria trust fund operate under the umbrella of the African Development Fund Group.
Understanding the African Development Bank (ADB)
Founded in 1964, the African Development Bank Group is comprised of the African Development Bank, the African Development Fund, and the Nigeria Trust Fund. Its overall mission is to contribute to the economic development and social progress of its member nations.
The bank works towards these objectives by lending or investing money for a wide range of public and private projects and programs.
Its money for loans is derived from subscriptions from its non-African member nations and investment earnings in its African Development Fund and Nigerian Trust Fund.
The Bank has provided a total of $55 billion in loans and grants in the region.
ADB Operational Priorities
The African Development Bank has five operational priorities, established in 2008 and still being pursued today:
- Infrastructure development: Transport, energy, and water systems remain underdeveloped or undeveloped in much of Africa.
- Regional economic integration: The continent has 54 nations and they lack the integration that allows the European Union, for example, to act as a single power in the global marketplace. Landlocked nations are particularly hampered by poor access.
- Private sector development: The bank focuses on delivering financing, advice, and technical assistance to entrepreneurs, particularly in small and medium-sized enterprises.
- Governance and accountability: The bank has no government powers but strives to promote accountability and resource decentralization in governments across Africa.
- Skills and technology: Unemployment among young Africans has long been a major issue, and it was exacerbated by the COVID-19 pandemic. As many as 60% of younger Africans are unemployed, according to the Brookings Institution. The ADB aims to address the problem with technical and vocational programs designed to address specific needs in the labor market.
Current ADB Projects
At a meeting with investors in March 2022, the Bank's President Akinwumi Adesina announced that the bank had secured $32.8 billion in new investment capital for current projects. They include funding for a 745-mile from Lagos, Nigeria, to Abidjan, Ivory Coast. Lagos-Abidjan Highway.
Other projects receiving new financing in 2022 include a new medical city in Accra, a fund that provides health services to low-income South Africans, and two pharmaceutical manufacturing facilities.
The bank also is currently partnering with the United Nations in a number of environmental initiatives aimed at sustainable development in rural and urban areas.
In 2022, Bank President Akinwumi Adesina announced that it had arranged for $15.6 billion in funding for the Lagos-Abidjan Highway. This project will connect West Africa's major cities in Nigeria and Ivory Coast.
African Development Bank vs. African Development Fund vs. Nigerian Trust Fund
The African Development Bank Group is comprised of three entities: the African Development Bank, the African Development Fund, and the Nigerian Trust Fund.
- The African Development Bank facilitates investment in public and private projects and programs that contribute to the economic well-being of Africa and its people.
- The African Development Fund finances economic and social programs in the lowest-income and most fragile African countries. Its priorities are projects devoted to critical needs such as food security and access to clean water.
- The Nigerian Trust Fund co-finances programs with the African Development Bank and the African Development Fund in addition to running its own independent projects, using money provided by the government of Nigeria. Its programs are aimed at helping the lowest-income African nations.
Achievements and Challenges
Change for both better and worse has accelerated in Africa in the last two decades, according to an analysis for the Center for Strategic and International Studies of the challenges facing the African Development Bank.
A movement toward democratic government in some African nations, and the rapid adoption of internet and cellphone services, are positives for many of the continent's 54 nations. Corruption and violence have crushed growth in others.
The report recommends both greater funding from donor nations and greater cooperation among the various organizations contributing to Africa's economic and social development.
The African Development Bank has contributed to hundreds of projects large-scale and small that improve the daily lives and futures of Africans. A few examples:
- In southwestern Kenya, rural Narok County got its first sewage treatment plant in 2022. Funded by the Bank and the Kenyan government, it is part of a nationwide water and sanitation project.
- The response of the medical community to the COVID-19 pandemic was enhanced by the African Development Bank, which was among a number of organizations that responded to the crisis. The bank approved a $4.2 million grant for equipment used for critically-ill patients at a teaching hospital in South Sudan.
- The bank financed upgrades to the equipment used in a mechanical engineering workshop at a technical school in Niger.
Goals of the African Development Bank (ADB)
The organization's stated goals are as follows:
- End poverty in all its forms everywhere
- End hunger, achieve food security and improved nutrition and promote sustainable agriculture
- Ensure healthy lives and promote well-being for all at all ages
- Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all
- Achieve gender equality and empower all women and girls
- Ensure availability and sustainable management of water and sanitation for all
- Ensure access to affordable, reliable, sustainable and modern energy for all
- Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
- Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation
- Reduce inequality within and among countries
- Make cities and human settlements inclusive, safe, resilient and sustainable
- Ensure sustainable consumption and production patterns
- Take urgent action to combat climate change and its impacts
- Conserve and sustainably use the oceans, seas and marine resources for sustainable development
- Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss
- Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
- Strengthen the means of implementation and revitalize the global partnership for sustainable development
Who Funds the African Development Bank?
The bulk of the money used for African Development Bank projects comes from non-regional member countries. That is, it is donated by nations outside Africa. Currently, there are 28 non-regional member countries, including the United States, China, Japan, and the United Kingdom.
What Is the Official Language of the African Development Bank?
The African Development Bank has two official languages, French and English. Its headquarters is located in Ivory Coast, where French is the official language.
Why Was the African Development Bank Created?
The African Development Bank was created to promote economic and social development across all of Africa. The bank's primary mission is to reduce poverty. However, that can be achieved only by building the essential infrastructure necessary for economic progress.
Which Is the Most Powerful Nation in Africa?
Egypt often tops the list of most powerful nations in Africa, due to its relatively high gross national product and its strong military. (Globally it ranked #29 in a US News & World Report ranking of most powerful nations.)
South Africa is often cited as Africa's most economically powerful nation. It is becoming Africa's financial and banking capital.