African Development Fund

Description

The African Development Fund (AfDF), part of the African Development Bank Group (AfDB), contributes to poverty reduction in its regional member countries by spurring sustainable economic development and social progress. The AfDF is comprised of 32 contributing countries, including the United States, and benefits 38 developing countries, nearly half of which are fragile states.

What does it buy?

The AfDF provides concessional funding for projects and programs. AfDF-eligible countries include those on their way to becoming new emerging markets and those that remain fragile and need special assistance for basic service delivery. Funds go toward the second installment to the AfDF’s 15th Replenishment (AfDF-15), totaling $7.5 billion and runs from FY 2020 through FY 2023.

Why is it important?

• A key priority of AfDF-15 is addressing the roots of fragility and improving resilience. The AfDF increased its allocation to its Transition State Facility by 13% above AfDF-14.
• In 2019, AfDF regional member countries saw the following benefits:
  • 468,000 people with new electricity connections—291 M.W. capacity installed, including 174 M.W. of renewable and 678,00 tons of CO2 emissions reduced.
  • 10.1 million people with new or improved access to water and sanitation, including 4.9 million women.
  • 180,000 people with better access to education.
  • 436 km of cross-border roads constructed or rehabilitated, and 3,919 km feeder roads rehabilitated or built.
• In 2019, the share of climate finance increased to 36% of all approvals.
• Every $1 in U.S. contributions to the last replenishment, AfDF-14, leveraged more than $11 in contributions from other donors and internally generated resources. In the last three years, the Fund has increased financial support 17-fold to the continent’s least developed countries.

Why should Americans care?

• AfDF supports the U.S.’s national security strategy. Nineteen of the AfDF’s 38 client countries are fragile and conflict-affected states in sub-Saharan Africa—including Mali, Chad, and Niger—on the front lines of the fight against terrorism.
• AfDF reduces humanitarian and health crises. AfDF financing addresses the root causes of migration flows and humanitarian crises in Africa’s poorest countries.

COVID-19 Impacts

• In response to COVID-19, AfDF pledged $3.1 billion for sovereign and regional operations in AfDF countries.
• Since the start of the pandemic, AfDF has quickly approved projects to help their members cope with the virus, recently approving grants and loans to Uganda, Rwanda, and Djibouti for a range of COVID-19 response projects that will support healthcare systems and aid in economic recovery.

What more could be done?

• U.S. unmet commitments to the AfDF and the Multilateral Debt Relief Initiative (MDRI) in F.Y. 2020 amount to approximately $355 million.
  • These unfulfilled commitments decrease the financial capacity of the AfDF, reducing the funding available to address instability in fragile states, the root causes of migration and humanitarian crises, and health emergencies.