Business News of Wednesday, 24 October 2018
Ahead of its maiden African Investment Forum next month, the African Development Bank continues to see another year of sustained indicators, underlined by a stellar Triple-A rating by all three major agencies and sharply increased earnings.
The inaugural Forum takes place 7-9 November 2018 in Johannesburg, South Africa, offering a platform for sourcing funding for bankable African projects, brokering infrastructure deals and providing innovative financial solutions.
The event will attract key global companies, financial players, and public officials who will address the continent’s critical infrastructure investment gaps.
The Bank’s performance and ratings are based on the solid support from its shareholders, including in the form of strong callable capital. Net operational earnings for 2017 showed a 63-per cent jump to $597 million from $109 million in 2016 – capping a five-year upward trend from 2013.
In projects performance, the Bank disbursed a record US$5.1 billion to projects and programs across Africa in 2017, an increase of 14 per cent over the previous all-time high of $4.5 billion in 2016.
The Bank’s financial performance and overall achievements across other key metrics like the volume of new development assistance, disbursements and governance, were excellent in spite of a well-recognized difficult operating environment.
“Of all multilateral development banks, African Development Bank operates in the most challenging ‘operating environment’ defined by rating agencies as a reflection of the risks associated with the countries of operation,” Senior Vice President, Charles Boamah, noted.
The Bank’s core agenda targets lifting out of poverty 38 African countries considered as the continent’s most vulnerable and least developed. Since its founding in 1974, the Bank has invested a total of $45 billion in operations across Africa with a significant focus on the LDC countries.
Boamah said the Bank’s challenging operating environment was offset by the institution’s intrinsic financial strength, which prompted shareholders at this year’s Annual Meetings in May to approve the formal commencement of discussions for a possible seventh General Capital Increase for the Bank Group.
Such an increase “would further strengthen the financial base of the Bank, thereby enabling it to further scale up its support to African countries, including those facing conditions of fragility,” Boamah added.
Since assuming office in September 2015, President Akinwumi Adesina has overseen wide-ranging institutional reforms and restructuring at the Bank, with significant positive impact on its development programs and cost savings.
The 2018 Aid Transparency Index Report issued by Publish What You Fund ranked the African Development Bank 4th among 45 development institutions surveyed, lifting the Bank by six positions since 2016.
The Bank has the lowest ratio of Administrative Expenses to Adjusted Equity at 2.2 per cent, meaning that it spends the least in administrative costs for every dollar entrusted to it by shareholders.