The African Development Bank (AfDB) is a regional multilateral development finance institution to mobilize resources for Africa’s economic and social development. AfDB was established in 1964 and comprises of the African Development Bank, the African Development Fund, and the Nigeria Trust Fund. The Bank is currently based in Tunis, Tunisia.
AfDB provides loans and grants to African governments and private companies investing in the regional member countries (RMC) in Africa and accounts for 6 percent of total development assistance to the continent. A major chunk of AfDB lending caters to infrastructure development like power supply, water and sanitation, transport and communications. AfDB’s focus areas include allocation of loans and equity investments for the economic and social advancement of the RMC and coordinating development policies and plans of RMCs. It also provides technical assistance for development projects in the region and encourages investment of public and private capital for regional development. Despite its regional focus, AfDB works in tandem with other international financial institutions (IFIs), including the World Bank Group, and often provides complementary funding for joint projects and initiatives. Although initially only African countries were permitted to join the AfDB, non-African countries were also given membership since 1982. AfDB has 78 members, of which 53 are African countries and 25 American, European, and Asian countries.
The AfDB is owned and funded by member governments and controlled by a Board of Executive Directors. Member’s voting power is in accordance with their share and is split on a 60% -40 % basis between regional and non-regional member countries. Nigeria is the largest AfDB shareholder with nearly 9 percent of the vote. All member countries are represented on the AfDB Board of Executive Directors. The Board of Executive Directors decide on the allocation of loans and grants and makes the policy decisions of AfDB.
AfDB is diversifying its operations and is focusing more on the role of women, education and structural reforms, and lent its support to key initiatives such as debt alleviation for Heavily Indebted Poor Countries and the New Partnership for Africa’s Development (NEPAD). AfDB is also designated the lead agency to facilitate “NEPAD infrastructure initiatives”, which are regional integration projects led by African Regional Economic Communities (RECs). AfDB received AAA rating in 2003 and had a capital of $32.043 billion.