The African Development Fund - 40 Years of Contribution to Africa's Social and Economic Transformation

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  • 4,000 loans and grants for a total of US$36 billion
  • 95% of Cape Verde's population have access to power
  • The distance between Bamako and Dakar reduced by 200 km

The African Development Fund (ADF) was created in 1972 to accompany the least fortunate African economies on the road to social and economic progress. At the time it is celebrating its 40th anniversary, this African Development Bank group (AfDB)'s window for grants and concessional loans can be proud of its several decades of achievements and numerous results to showcase its contribution to improving the lives of Africans.

Across the entire continent, from Senegal to Tanzania, from Niger to Lesotho, through the Central African Republic and the Democratic Republic of Congo, it has numerous stories to tell. One of the most expressive is the success of Cape Verde. This country that saw its gross national income per capita grow from 175 dollars in the early 1980s to 3540 dollars in 2012 is now a middle-income country. In 2008, it graduated from the United Nations Least Developed Countries list for achieving one of the highest rankings in social indicators in Africa from education to health care to infrastructure.

Cape Verde's admirable political governance, effective social and economic policies and efficient use of resources has benefited people like Artemisa Irona Lopes Rocha, from Jamaica, a neighborhood on the outskirts of Praia. Thanks to the connection of her area to the electricity grid, she was able to open a business that continues to grow. In her words, "this was highly beneficial to my business. Electricity allows me to sell several products. Before, I was not able to sell frozen products or certain beverages such as beer or wine. I make more profits today."

The advent of electricity has changed people's lives in neighborhoods similar to Jamaica across the country. Now they dream of changing their lives by engaging in income-generating activities and small businesses. Today, 95% of the country's population has access to power, generated not only by thermal plants, but also by clean wind and solar energy. Availability of such clean and renewable energy has been made possible as a result of financial assistance from the ADF and the private sector window of the AfDB.

ADF Support Appreciated

The success of Cape Verde is also the result of a partnership with development institutions such as the AfDB Group. The AfDB's support to the country has been highly appreciated. According to former President Pedro Pires, "the African Development Bank Group well understood our situation as an island country. The African Development Fund was the appropriate window to get resources for our development. At the time we could not borrow from the international market at commercial rates.

We really appreciate the efforts of the African Development Bank Group to support African countries, notably those of the African Development Fund that provides grants and loans at good conditions".

Another AfDB Group project, with ADF financing, which has made a huge change in the lives of its beneficiaries, is the 50-km Nairobi-Thika superhighway in Kenya, with the AfDB Group contributing the largest (US $180 million) share of the US $360 million total cost.

The new superhighway has started to yield impressive and visible results. It serves commuters who travel daily to work in secondary and tertiary sectors within Nairobi city's central business district. Commuters are enjoying faster, more reliable, comfortable and more affordable journeys. The time taken to cross Thika town and Nairobi has been shortened from about three hours to about forty-five minutes.

Thika Superhighway: A National Pride

Users of the highway, about 1 million people, are predominantly people living along the route. They are engaged in various economic activities, and a large proportion of them are women who sell food products sourced from Thika and beyond. During the launch of the road in November 2012, Kenya President Mwai Kibaki described it as a source of "national pride".

On regional integration, the ADF has tangible results to show as well in many parts of the continent. Among others is the Southern Bamako-Dakar Corridor Road Project.This project completed in 2011 spans 800 km between Mali and Senegal. The Corridor has reduced the distance between the two cities by 200 km and has substantially eased the movement of people and goods in this part of the West African sub-region.

Beyond the construction of the road, the project also brought other social and economic benefits to communities. In both Senegal and Mali complementary projects helped to rehabilitate 100 kilometres of rural roads, build fences for primary schools, as well as furnish classrooms.In total, ten health centres were built in both countries. Twenty boreholes were constructed to provide access to clean drinking water, a challenge many communities along the corridor were facing. The construction of these wells also helped to alleviate the burden of domestic labour on women who spent hours during the day fetching water.

Contribution to economic transformation

Today, the change is visible everywhere along the corridor. There have been notable spill-over effects, as illustrated by the decrease in illicit fees and charges. The project created employment opportunities for local residents to the tune of 5 million dollars during the construction phase. Several workers are still employed to do routine maintenance work.

The Corridor, at a cost of 304 million dollars is the result of a partnership between Mali, Senegal, and several donors such as the ADF that contributed 89 million dollars, about 30% of the project total cost.

Overall, in 40 years the ADF has provided about 4,000 loans and grants for a total of US$36 billion that have improved the lives of many Africans. It has thus contributed significantly to the social and economic transformation of the continent. The ADF success is, to a great extent, due to its effective partnerships approach with all parties concerned with specific country development, from the project beneficiaries themselves to civil society to public authorities. The success is also due to the Bank Group's selective and focused approach in supporting countries in strategic areas such as Fragile States, infrastructure, governance and regional integration.

Moving forward, the ADF will continue to stand by African economies, so as to strengthen social and economic transformation, and intervene more robustly in areas such inclusive growth, green economy, agriculture and food security, as well as gender and fragile states.

The ADF-12 cycle ends in 2013 and the replenishment of ADF-13 starts in February 2013. With the numerous socio-economic challenges that lie ahead and the increasing needs of countries for more resources, the AfDB Group will need appropriate financing for ADF-13. An essential condition if the institution is to continue its contribution to Africa's economic transformation.

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