The African Development Bank (AfDB) Group and six other prominent Multilateral Development Banks (MDBs) have pledged to provide US$15 billion to promote trade and strengthen the African financial sector.
The other organizations, the Agence française de développement (AFD), the Development Bank of Southern Africa (DBSA), the European Investment Bank (EIB) the Islamic Development Bank (IDB), the KfW Bankengruppe of Germany and the World Bank.
The support will also increase lending for infrastructure, agribusiness and small and medium enterprises in the region affected by the global economic slowdown.
The increased support is part of a coordinated response to prevent the global economic crisis from reversing decades of progress, growth and investment in Africa.
"Beyond actions taken by individual institutions, the need to join forces and pool resources and expertise cannot be overemphasized. The scope and magnitude of the current global financial crisis compels us to look for innovative means to work with maximum collaboration to increase our support to the private sector in Africa," AfDB President Donald Kaberuka, said at the agreement' signing ceremony in Dakar on Monday May 11.
"We must act now. Through this partnership, we can make a difference. The African
Development Bank is fully committed to this process and will spare no effort for its successful implementation," Mr. Kaberuka added.
For his part, the European Investment Bank President, Philippe Maystadt, said the joint support had become necessary in view of the magnitude of the global economic downturn which he described as "one of the deepest crisis in recent history".
"We are committed to expand our support for viable priority projects in the infrastructure sector and to step up our operations in support of the African banking sector that are key for economic growth," he said, adding that "strengthening cooperation with our partner institutions will be vital in achieving our goals."
Under the plan, the AfDB will use an Emergency Liquidity Facility of US$1.5 billion to provide financial support to eligible countries and operations grappling with liquidity problems, introduce a new US$500 million trade finance.
The AFD will contribute US43.1 billion for Small and Medium Enterprises and infrastructure projects while the DBSA will provide US$4 billion and US$50 million grant assistance for project development and training.
The financial institutions in the joint initiative believe that Africa's long-term economic prospects remain strong and that coordinated support by the institutions, governments and the African organisation will help the economies of the region emerge healthier and stronger.
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Onike Nicol-Houra
