African Development Bank (AfDB): Purpose, history, functions & power

The African Development Bank (AfDB) is a vital institution that plays an important role in Africa’s economic development. The main goal of the bank, which was founded in 1964, is to promote economic growth and reduce poverty on the continent by financing development projects and programs.

In this article, we will look at the AfDB’s history and mission, as well as its functions and responsibilities, the power and influence it wields in shaping the African economic landscape, and current projects and initiatives that the bank is pursuing to propel Africa’s development forward. 

Whether you are a policymaker, a business leader, or simply interested in Africa’s development, this article will provide you with a thorough understanding of the African Development Bank and its impact on the continent.

The Purpose and History of the African Development Bank 

Created to promote economic and social development efforts on the continent, the African Development Bank Group (AfDB) comprises three entities: the African Development Bank, which is the original institution, created following an agreement signed by 23 founding member states, on August 14, 1963, in Khartoum, Sudan. This agreement entered into force on September 10, 1964. 

The group includes two concessionary windows – the African Development Fund (ADF), created on November 29, 1972, by the African Development Bank and 13 non-African countries; and the Nigeria Trust Fund (NTF), established in 1976 by the Federal Government of Nigeria.

The inaugural meeting of the Bank’s Board of Governors was held from 4 to 7 November 1964 in Lagos, Nigeria, and headquarters opened in Abidjan, Côte d’Ivoire, in March 1965. July 1, 1966. From February 2003, the Bank operated from its Temporary Relocation Agency (TRA) in Tunis, Tunisia, due to the prevailing political conflict in Côte d’Ivoire at the time, until late 2013, when started the return to its headquarters in Abidjan. As of June 2015, more than 1,500 employees had returned to headquarters, out of a total of more than 1,900 Bank staff.

The AfDB’s initial focus was on financing infrastructure, agriculture, and industrial development projects and programs. However, the bank’s focus has shifted over time to include areas such as human development, private sector development, and regional integration. The bank’s mandate is to promote economic growth and reduce poverty on the continent, which it accomplishes through a variety of means.

The AfDB’s investment operations are one of the most important ways in which it promotes economic growth. The bank finances development projects and programs in a variety of fields, including infrastructure, energy, water and sanitation, transportation, and agriculture. The bank also provides technical assistance to African countries to help them build the infrastructure required to support economic growth.

Also readAfrican Union (AU): Purpose, power, functions and history

The functions and responsibilities of the African Development Bank 

The purpose of the Bank shall be to contribute to the sustainable economic development and social progress of its regional members – individually and jointly.

To implement its purpose, they have the following functions:

  1. Deploys emergency operations to support African states in their health, economic and social response to the Covid-19 pandemic;
  2. Supports human social development by supporting reforms in the health, social protection, education and vocational training sectors;
  3. Promotes job creation by supporting entrepreneurship and developing vocational training;
  4. Accompanies the modernization of the economy by supporting major reform projects, such as the development of the financial sector ;
  5. Provides its expertise in the financing of structuring projects, such as the Noor Ouarzazate solar complex project and the Nador West Med port ;
  6. Contributes to the industrial acceleration and the improvement of the territorial competitiveness of Morocco ;
  7. Supports the logistics competitiveness of the national economy through the modernization of transport infrastructure ( road, rail, air and port );
  8. Supports the process of opening up rural areas through the development of electricity transmission networks and rural electrification, drinking water supply and the construction of rural roads

In carrying out its functions, the Bank seek to cooperate with national, regional and sub-regional development institutions in Africa. To the same end, it should cooperate with other international organizations pursuing a similar purpose and with other institutions concerned with the development of Africa.

The Power and influence of the African Development Bank on African economic development 

One of the most significant ways in which the AFDB exerts its power and influence is through its financing and investment activities. The bank provides loans, grants, and other forms of financial assistance to governments, private sector companies, and civil society organizations in Africa. These funds are used to support a wide range of development projects, including infrastructure, energy, agriculture, and health care.

The AFDB also has a powerful influence on African economic development through its research and policy work. The bank conducts extensive research on the economic and social conditions in Africa and uses this information to inform its policies and programs. It also works closely with other international organizations, such as the World Bank and the International Monetary Fund, to coordinate efforts and ensure that its policies are in line with global development goals.

Another way in which the AFDB exerts its power and influence is through its partnerships with other organizations. The bank works closely with governments, private sector companies, and civil society organizations to implement development projects and programs. These partnerships are essential for building the capacity of local organizations and communities, and for ensuring that development efforts are sustainable and inclusive.

The AfDB also plays an important role in promoting African regional integration and cooperation. This is accomplished through initiatives such as the African Economic Outlook and the African Development Report, which provide a thorough analysis of Africa’s economic situation and recommendations for addressing the continent’s development challenges. The African Union is also supported by the bank.

Conclusion 

The African Development Bank is critical to the continent’s economic development and poverty reduction. Its history, purpose, functions, and power have all played an important role in shaping the African economic landscape. Current projects and initiatives of the bank, such as the “High 5s” program, are expected to propel Africa’s development and improve the lives of millions of people. The AfDB’s efforts should be supported and encouraged as it works to ensure Africa’s future prosperity.

Frequently Asked Questions (FAQs)

Is the African Development Bank (AfDB) a subsidiary of the African Union?

No, the AfDB is an African independent African organization from the African Union; nonetheless, the AU works together with the AfDB.

Where is the headquarters of the AfDB?

The AfDB’s headquarters is located in Abijan, Cote d’Ivoire

Don't miss a thing. Follow us on Telegram. If you love videos then also Subscribe to our YouTube Channel. We are on Twitter as MakeMoneyDotNG.

Richard Okoroafor

Richard Okoroafor

Richard is a brilliant legal content writer who doubles as a finance lawyer. He brings his wealth of legal knowledge in corporate commercial transactions to bear, offering the best value that exceeds expectations.

Articles: 191

Leave a Reply

Your email address will not be published. Required fields are marked *